Halal consumers in Indonesia
In the country with the largest Muslim population in the world, the topic of halal (Arabic for being permissible or allowed) and haram (Arabic for being forbidden) is something of a daily concern. Islamic values guide people’s lifestyles, which also translates into their purchasing behavior and preferences for services. While being halal is always associated with products being pork-free, its further classification often requires personal interpretation based on both the Islamic teachings in the Quran and Sharia law. In addition to being free from pork, a recent study found that Muslim consumers in Indonesia also defined halal as being certified by an Islamic body, alcohol-free, and pure, among other definitions.Halal food and beverage accounts for the largest segment based on consumer spending in the Indonesian halal industry, totaling approximately 135 billion U.S. dollars as of the latest data. Ready-to-eat packaged foods and ready-to-drink packaged beverages topped the list of halal consumers’ purchases in Indonesia. Furthermore, halal media and recreation, as well as halal fashion, are also among the segments recording high consumer spending. They came in second and third place after halal food and beverage, with consumer spending amounting to around 21 billion U.S. dollars and 16 billion U.S. dollars, respectively.
The journey to becoming a global halal industry leader
Known as one of the leading exporters to the Organization of Islamic Cooperation (OIC) countries, Indonesia’s halal trade activities are not only limited to the OIC member countries. In 2020, Indonesia reported a surplus in trade balance with the export value of halal products to both OIC and non-OIC countries totaling approximately 47 billion U.S. dollars. This far exceeded the value of Indonesia’s imports for halal products in that year, which stood at around 14.5 billion U.S. dollars. This surplus in the trade balance is paving the way for Indonesia’s halal industry to tap into a wider global market and capture more trade opportunities.With the world’s Muslim population expected to continue to expand in the next years and even projected to outnumber the non-Muslim population of the world, the global halal industry will stay robust. For Indonesia, this is the right set of circumstances. By producing halal products for both local and global markets, as well as maximizing local production capabilities to substitute import-dependent halal product categories, Indonesia may soon transform into a global halal industry leader.
