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With Muslim consumers around the world searching for denominational products and services, the Islamic economy is experiencing a physically powerful expansion across its vertical sectors.
As 1.8 billion Muslim customers seek to meet their faith-inspired needs, creating a formidable customer base, spending on the Islamic economy is expected to continue to grow.
The affinity and wealth of Muslims around the world, the growing commitment of leading brands, increased investor interest, marketing campaigns and brands similar to confessional desires are driving the expansion of the sector.
In 2018, Muslims spent $2.2 trillion in the food, pharmacy and lifestyle sectors, representing year-on-year growth of 5.2%. This figure is expected to be successful at $3.2 trillion through 2024, according to the state-of-the-world report of the Islamic economy.
The report revealed the top ten drivers of the expansion of the Islamic economy: a developing population; Greater wealth; develop affinity; Moral consumerism of digital connectivity; Multinational expansion; economic diversification and development; halal trade; regulations and investor profitability.
By measuring the strength of the Islamic economy in 73 countries on the basis of drivers and other considerations, Malaysia led the World Islamic Economy Indicator (GIEI) rating with a score of 111, followed by the United Arab Emirates (79), Bahrain (60) and Saudi Arabia (50.2).
In terms of business opportunities, halal ingredients, Islamic financial technology and modest luxury clothing were among the key expansion sectors by 2020. At the local level, Dubai seeks to identify itself as the capital of the Islamic economy and has taken several steps to achieve this goal. Array The Dubai Islamic Economic Development Centre (DIEDC) presented its renewed Islamic Economy Strategy (2017-2021) 3 years ago to identify new measures to track the expansion of 3 key sectors: Islamic finance, halal products and the Islamic lifestyle (including culture, art, fashion and family circle tourism) and measure its contribution to the country’s GDP.
In 2018, the Islamic economy contributed 41.8 billion dirhams (9.9%) Dubai’s GDP, an increase of 2.2% from 40.9.5 billion dirhams in 2017.
Islamic banks in the United Arab Emirates and the region have kept up, attracting a lot of attention.
Earlier this year, Dubai Islamic Bank (DIB) completed the acquisition of rival Noor Bank to create a lender with total assets of more than 275 billion dirhams, making it one of the world’s Islamic banks.
Meanwhile, Malaysia’s largest Islamic bank, Maybank Islamic, also started operations at the Dubai International Financial Center (IFLD) in February, marking its first office.
The Islamic Banking Index 2019 of the Islamic Bank of the Emirates, which surveyed more than 900 people with a bank account in the United Arab Emirates and a minimum source of income per month of Dhs 5,000, found that 60% had fed on at least one Sharia. -compatible product, compared to 55% in 2018. Meanwhile, the interest of non-Muslim consumers surveyed for Islamic products has also increased since 2018, adding a 9% increase in existing Islamic accounts and a 6% increase in Islamic savings accounts. .
“Islamic finance is expected to continue to grow in the 2020s and beyond, as the GCC countries, Malaysia and Indonesia are driving the expansion of Sharia-compliant monetary products. If we take a look at Saudi Arabia, Moody’s expects the penetration of Islamic finance into the kingdom to increase to 80% of system-wide assets (including traditional and Islamic financial assets) over the next 24 months, up from 77% in 2018, due to growing demand for businesses and individuals,” says Philip KingArray, global director of retail banking at ADIB.
“However, for the Islamic financial industry to continue to grow to its full perspective and succeed in the global target of $3.8 trillion in assets through 2022, it will want to attract beyond a purely Muslim visitor base. This is a transformation that ADIB has controlled and we are seeing an expansion in our non-traditional visitor base,” Adds King.
Similar to traditional banking and several other industries, technological advances such as fintech, synthetic intelligence (AI) and blockchain, among others, can also facilitate the area of Islamic finance by providing faster and more transparent transactions, security and governance.
“Innovation, which adds to the expansion and progression of the financial technology market segment, has created unprecedented expansion opportunities for Islamic finance. Crowdfunding and state-of-the-art payment facilities consistent with Sharia principles (adding tokenization) have allowed retail investors access to a wider variety of monetary and active facilities, while gaining greater transaction security,” says Bryan Stirewalt, chief executive of the Dubai Financial Services Authority.
“Technology has an important role to play in the functioning of the market and in raising public awareness of Islamic products. By allowing a less difficult comparison between Islamic financial products in the banking and takaful fields, it has contributed to greater market penetration.
However, as the largest ecosystem continues to be affected by the existing Covid-19 pandemic, the area of Islamic finance has also been affected. Despite the resulting blocking protocols and recessions in major Islamic financial countries, the sector is expected to revel in a single-digit expansion in 2020-21, following an 11.4% expansion in 2019 backed by robust functionality in the sukuk. suggests a report through SP Global Ratings.
“Islamic finances are known for offering socially guilty products as well as sustainable finance, and the surroundings of Covid-19 can provide an opportunity to exploit them. At ADIB, the support and support systems we provide to our individual and professional clients have been very involved and we remain attentive to their conversion needs,” says ADIB’s King.
Matthew Escritt, partner, bank and finance at Pinsent Masons Middle East adds: “In today’s cash shortage environment and while all businesses are dealing with the complex business that has an effect on the pandemic, the opportunities for the Islamic economy are clear. Well – capitalized Islamic monetary establishments are well placed to fill the expected liquidity hole and help strong companies during an era of deep economic uncertainty.” What is really compelling at this point is that these opportunities for percentage market expansion are equal in the UAE through effort through the government to improve the regulatory environment in which the Islamic economy will operate. The state-of-the-art legislative projects recently introduced through the Centre for Islamic Economic Development in Dubai are well synchronized and it is very likely that this confluence of occasions will bring the beginning of a purple point for the entire industry.
Similarly, British designer Hana Tajima collaborated with Japanese retailer Uniqlo to provide a modest collection. Modest fashion has also made its way through catalogues, campaigns and awnings: Halima Aden, the first hijabi style that adorned the British Vogue awning. Meanwhile, occasions like Modest Fashion Weeks have highlighted cultural and ethnic inclusion. Dedicated to the industry with more than three hundred designers and brands and more than 500 influencers, the occasions took place worldwide from 2016, adding Istanbul, London, Dubai, Jakarta and Amsterdam.
“I think the concept of modest fashion has skyrocketed in recent decades. The industry is generating billions of dollars and is expected to grow in the coming years,” says Mosika Zeid, founder of the modest fashion brand Desert Cove.
“When I started Desert Cove, I felt there was a big gap. As a user who dresses modestly, I discovered that the features were limited, especially in terms of quality and aesthetics. But it’s wonderful to see that modest fashion is changing. You see more brands coming, influencers that bring more charm to the entire modest fashion industry and now there are also modest fashion weeks. In general, the modest fashion is well located.
The growing demand for elegant but modest clothing to combat stereotypes and constitute Muslim women has also attracted growing investor interest. In 2019, Goldman Sachs and Wamda Capital acquired a minority stake in Modanisa, a modest fashion store in Turkey.
“Most of my clients are Muslims. I would say that around 30-40% are not Muslims, especially in the eastern regions where women paint and live and like to dress modestly to respect culture. Modest fashion is anything that even non-Muslims adopt. To be honest, the fact that non-Muslims buy my garments makes me very satisfied; I now feel that more and more people are willing to question the trends posed through fashion tycoons and are pleased to stick to theirs. non-public style,” Zeid says.
“The young Muslim generation is increasingly aware of the presence of non-halal chemicals and ingredients in their cosmetics and non-public care products. Halal cosmetic brands are now forced to introduce new technologies into studies and development, formulas and production. All of this is due to the change in purchasing behavior, as product lines will now have to come with new halal products committed to other age groups and ethnicities. It is a developing industry, very competitive and fast paced. If you can keep up with product innovations, you’re in the game,” says Shamalia Mohamed, founder of Amara Halal Cosmetics, founded in the United States.
Brand identity plays a key role in attracting new consumers and consumers differentiate between traditional and halal brands.
“The use of the halal logo is a marketing tool because it informs and convinces consumers that the products were manufactured according to Islamic requirements,” Mohamed adds.
Global spending through Muslims on food and beverages, estimated at $1.4 trillion in 2018, is expected to succeed at $2 trillion through 2024, the SGIE report reveals.
Given its popularity, halal food deserves to be a popular choice among Muslims and non-Muslims, in various Islamic and non-Islamic economies.
At the UAE regional point, the UAE Standards and Metrology Authority (ESMA) has introduced the “national halal mark” and certified halal products.
In addition, the Dubai Airport Free Zone Authority (DAFZA) has presented the Halal Marketing and Marketing Centre to global stakeholders in halal products and facilitated their growth.
The technology also facilitates the expansion of this sector; Singapore-based food technology startup WhatsHalal aims to gain advantages for both food brands and consumers with its halal traceability platform that connects the entire source chain.
In 2017, a total of 251 institutions were approved through the Drug Control Authority (DCA), which is from the Malaysian Ministry of Health, according to official figures.
Meanwhile, in terms of opportunity, the SGIE report highlighted halal gelatin, halal vaccines, halal nutraceuticals and halal holistic homeopathy as high-growth sectors in 2020.
The global market for nutraceuticals and halal vaccines has a truly extensive expansion potential, estimated at $49.3 billion in 2019 and is expected to succeed at $88.5 billion until the end of 2027, said global market intelligence company Coherent Market Insights.
In addition, in 2015, the global gelatin market was estimated at $2.7 billion, with the use of gelatin in prescription drugs and nutraceuticals estimated at $1.3 billion, according to Saakh Pharma research.
Pharmaceuticals and nutraceuticals are the time and third largest category of gelatin programs after food, and account for 26% and 21% of the market, respectively, he added.
Faith-inspired and travel-related content includes innovations in privacy, non-alcoholic environments, halal meals, and prayer arrangements.
The 2019 Mastercard-CrescentRating Halal Travel Frontier report learned 17 trends that deserve to shape halal travel. Technology, environment and social activism will have a significant effect on the halal travel industry, while technologies such as augmented truth (AR), virtual truth (VR) and artificial intelligence will also drive new trends, according to the report.
“In fact, there has been an increase in the call to those inspired by faith and I think it is largely due to the fact that some parts of the industry are responding to the need. I think the generation industry has a lot to offer to provide a fair visitor experience, however, these are faith-based requests and general calls. With apps that have been held lately for consumers looking for Qiblah search engines or content-rich destination guides, they have helped Muslims self-explore new destinations,” says Nabeel Shariff, founder of the halal holiday site Rihaala.com.
“Muslim travelers are as ambitious and adventurous as other lifestyle segments, so the first key is to provide exceptional reports. Adapting these reports to the demands of your religion adds an additional layer of convenience and trust to the destination, hotel, or charm in which you invest your time and money. The third key is to make those needs readily available and not unusual in a destination,” Shariff adds.
Meanwhile, halal and recreational media have an expanded portfolio of content – videos and TV series – as well as programs for the wishes of Muslims.
Muslim media spending and recreation $220 billion in 2018 and is expected to succeed at $309 billion through 2024, the SGIE report reveals.
While occasions such as the Mosquers Film Festival arise, which aims to entertain and build bridges through the presentation of Muslim experiences, content encouraged through religion for children, such as cartoons, are also gaining strength and importance.
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