Could halal cosmetics be developing into a new global C&T niche market?

Demand for halal cosmetics worldwide is on the rise, driven not only by more affluent Muslim consumers but also growing interest in high quality, safe products. Sales of all kinds of halal-certified goods have surged in recent years alongside higher purchasing power in Muslim countries. Estimates for the global halal market range from US$547bn, according to the Malaysian Industrial Development Authority, to US$2.1 trillion, a figure cited widely by international media. Whatever the real size, everyone agrees that food accounts for the majority of sales. But new product categories are emerging.

“Before, people thought halal was only about the way you slaughtered an animal. Now awareness has moved from food to cosmetics and even pharmaceuticals,” says Irfan Sungkar, industry advisor to KasehDia Consulting, a Malaysian research firm that organises the annual World Halal Forum conference.

Unlike views on halal food, which tend to be similar across Muslim countries, attitudes to cosmetics vary widely. As global management consultancy AT Kearney points out in a report published last year: “in principle wearing cosmetics is haram (forbidden) no matter how they’re made, so the idea of halal is essentially moot.”

But for those Muslim women who do wear cosmetics, many like the idea of applying products that are prepared without pork fat and alcohol, even though they are not eating these forbidden ingredients. “A lot is about interpretation,” explains Hin Yuen Choy, managing director of Malaysian cosmetics firm Unza. “Conservative Muslims may wish to avoid alcohol altogether.”

Others simply want to assert their identity, suggests AT Kearney’s report, Addressing the Muslim market. “Even as they lean towards western-style products and lifestyles, many Muslims increasingly make choices that reassert their identity as Muslims and respect their ummah (community), the Qu’ran and sharia principles. Many consciously seek out products with an Islamic brand.”

Halal cosmetics have been available in Malaysia for about 30 years but they have seen especially strong growth in recent years and now make up 10-20% of the total market, estimates Choy. Unza’s Safi brand for instance, introduced in 1985, includes skin care, colour cosmetics, hair care, shower cream, fragrances, deodorants and toothpaste. All products are formulated without alcohol and do not contain animal-derived emulsifiers or gelatin. Suppliers have to be certified that they are not using the same equipment to make halal and non-halal ingredients.

Making edt without alcohol is challenging and results in a product that does not perform as well as standard fragrances, admits Choy. But despite such issues, the range recorded sales growth of 25% last year, compared with about 5% for the overall market. Part of that growth is coming from the halal certification, he believes. Sungkar said Muslims may simply want more assurance that the cosmetics they are using are healthy and sustainably sourced. “Halal comes together with ‘thoyyib’. That means it’s good for you and safe and doesn’t harm the world and animals around you.”

Other Muslim markets are less developed. Indonesia, with the world’s largest Muslim population, has a relatively small halal cosmetic market. And despite recent attempts to promote halal cosmetics in the Middle East, companies report lower interest in this region than Asia or even Europe. Unza’s Dubai office has not seen any demand for a halal range and instead sells the company’s other brands.

A recent KasehDia survey also found that consumers in Saudi Arabia and the United Arab Emirates (UAE) were least aware of halal cosmetics when compared with consumers interviewed in Europe and Asia. “For them, halal is only about meat products,” said Sungkar. The findings underline the problem with defining halal markets. “Islam is a religion and a culture, lived differently in many areas of the world. Hence the concept of a Muslim market is in many ways nebulous,” noted AT Kearney.

Dr Mah Hussain-Gambles, founder of halal-certified Saaf Pure Skincare in the UK, believes Muslims need to be educated about the market. “What you put on your body is also absorbed into the skin. And halal is not just about pork-free and alcohol-free products but also about safe ingredients, corporate social responsibility and the ethical side of the business.”

Some companies are already popular among Muslim consumers for this reason, despite having no halal certification. “The Body Shop boasts natural ingredients..and its marketing efforts are in line with Muslim values,” says the ATKearney report.

Greater availability of halal products could raise demand for certification however. “The thing is to create doubt among Muslim consumers that what they are already using is maybe not halal,” said Choy. This approach triggered reaction from multinationals keen to grow their market share in Malaysia. Choy claims that Colgate-Palmolive launched a halal-certified toothpaste in the country in response to growing sales of Safi toothpaste [Colgate declined to be interviewed]. When Unza launched a new Safi baby products range, Johnson & Johnson also sought halal certification, adds Choy.

But most halal cosmetic manufacturers remain smaller, niche players such as Australian firm Almaas, which makes halal colour cosmetics, or France’s Candea with its Jamal brand. These innovators may find demand from non-Muslim markets too. Most of Saaf’s sales are to non-Muslims in Europe, according to Mah. This is partly because the company has organic and vegetarian accreditation. But the halal certification allowed the firm to show that the products do not contain irradiated ingredients, alcohol or genetically modified organisms. “Halal covers all three.”

Mah believes that a halal label could be seen as the next “eco-ethical accreditation. People are looking for the next pure cosmetic.” Haji Harith Kassim, a Malaysia-based consultant who has worked with Colgate-Palmolive, agrees. “Halal is not only religiously pure but is also manufactured with the highest standards of quality. Before you can use a halal logo, you have to be rigidly audited.”

In the current economic environment, a halal certification may create new opportunities, he adds. “Here is the new USP [unique selling point].”