JEDDAH — Muslim spend on food and beverages expected to reach $1.9 trillion by 2021, the fourth State of the Global Islamic Economy Report (SGIE) report prepared by Thomson Reuters, the world's leading provider of intelligent information for businesses and professionals, in partnership with the Dubai Islamic Economy Development Centre (DIEDC), and in collaboration with DinarStandard said Tuesday.
The report estimates global Muslim spend across sectors at over $1.9 trillion in 2015, while the Islamic finance sector has around $2 trillion in assets. Food and beverage tops Muslim spend by category, at $1.17 trillion in 2015, followed by clothing and apparel at $243 billion, media and recreation at $189 billion, travel at $151 billion, and spending on pharmaceuticals and cosmetics at $78 billion.
The report also estimated that the revenue generated by Halal Certified Food and Beverage companies world-wide to be at $415 billion.
Halal food, the largest Islamic economy pillar by revenue has shown clear signs of maturity with increased private equity investments in the sector. Upgrades in regulations are also occurring, with the introduction of accreditation to oversee certifiers set to reduce complexity and encourage more players to enter the Halal food industry.
The Islamic finance sector has shown robust growth and increasing sophistication. This has been coupled by the emergence of crowdfunding and platforms. While the sector has been held back by a lack of awareness of Islamic Finance product offerings, there is considerable opportunity for sector growth to reach $3.3 trillion by 2021.
Halal travel continues to broaden its reach with tremendous growth in Halal beach resorts, the launch of several dedicated airlines and the launch of the Muslim answer to Airbnb, Bookhalalhomes, and TripAdvisor, Tripfez. While Halal travel is a niche sector building momentum, it is expected to grow with Muslim spend on outbound travel expected to reach $243 billion by 2021.
Modest fashion is gaining mainstream interest with several retailers and brands such as Dolce & Gabbana, Uniqlo and Burberry entering the industry and several notable investments driving the sector forward. As the sector gains traction, spend on Modest Fashion is projected to reach $368 billion by 2021.
The Halal pharmaceutical and cosmetics sector continues to expand as awareness about ingredients rises and new product development, such as permeable nail polish, the development of Halal vaccines and new ranges of nutraceuticals. Muslim spend on Pharmaceutical and Cosmetics products is expected to reach $213 billion by 2021 in aggregate.
Halal Media and recreation is driving a positive reinforcement of Muslims, as new genres are addressed, Muslim spend is expected to reach $262 billion by 2021.
Majid Saif Al Ghurair, Chairman, Dubai Chamber and Board Member of the Dubai Islamic Economy Development Centre, said: “The Islamic economy continues to mature, growing more complex and more stable each passing year. The sector is proving itself to be one of the most viable solutions to the stagnation that is plaguing global markets. This is where the Global Islamic Economy Summit can play a productive role, gathering decision makers and key stakeholders in one high-profile event to exchange knowledge and insights, enabling them to synergistically work together to drive the sector forward and achieve sustainable economic growth.”
He added: “The State of the Global Islamic Economy Report puts matters into perspective, proving, with numbers, the staggering growth and immense potential of the Islamic economy.”
Abdulla Mohammed Al Awar, Chief Executive Officer of Dubai Islamic Economy Development Centre, said: “For the fourth consecutive year, the State of the Global Islamic Economy Report presents new facts that further strengthen our conviction in Islamic economy’s ethical and regulatory framework and its ability to drive global economic growth”
Al Awar added: “A core challenge for the Islamic economy is the need to motivate more Muslims across the globe, especially the youth, to participate in developing this ecosystem and play an integral role in the production process. In doing so, Muslims can transform from being the largest consumer base in the world to a sizeable production base capable of achieving a more sustainable future.”
Nadim Najjar, Managing Director, Middle East and North Africa, Thomson Reuters, said “Islamic Economy is one of the fastest growing tranches of the global economy. The convergence between the Islamic economic sectors is strongly expected to enhance the Islamic economy space going forward. This annual report is now a point of reference for professionals and industry players looking at the current and forecasted trends in this area.”
The Islamic economy continues to evolve, driven by young Muslims asserting their values, and requiring companies to provide products and services that meet their faith-based needs and no longer being considered niche segments in the global economy. The Islamic economy estimated to be worth $1.9 trillion and Islamic finance sector has around $2 trillion in assets in 2015.
The report is released in the lead up to the Global Islamic Economy Summit 2016 (GIES) set to take place on Oct. 11-12 at Madinat Jumeirah in Dubai.
