The Brief / Economy A N A LY S I S MUSLIM CONSUMER SPEND ON PHARMACEUTICALS
Rising force
ILLUSTRATION: GETTY IMAGES/GMAST3R
The Islamic economy is seeing robust growth among different verticals, reports Zainab Mansoor
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formidable group of Muslim consumers are seeking to fulfill their faith-inspired needs, driving the growth of the Islamic economy. Several key factors are rallying its growth, such as growing engagement and product diversification, a burgeoning Muslim consumer base and a number of strategies dedicated to halal product and service development. Numbers back the optimism: The world’s 1.9 billion Muslims spent $2tn in 2021 across the food, pharmaceutical, cosmetics, fashion, travel, and media/recreation sectors, according to the State of the Global Islamic Economy 2022 report, produced by DinarStandard and supported by Dubai Economy and Tourism. The total spending signalled an 8.9 per cent year-on-year growth from the previous year.
“Growing consumer demand for diversity and inclusivity in cosmetics propelled halal cosmetic players. Muslims spent a total of $70bn on cosmetics in 2021, which is anticipated to increase to $93bn in 2025” gulfbusiness.com
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Muslim spend on food increased by 6.9 per cent to equal $1.27tn in 2021, and is forecast to reach $1.67tn by 2025. Also, Muslim spend on travel was valued at $102bn in 2021 and is anticipated to reach $189bn by 2025, the report added. Muslim-friendly hotels and restaurants are also expected to record growth in the coming years. Indicating notable investment activity, HalalBooking.com secured $5m in preSeries B funding, while Pakistani travel startup FindMyAdventure raised $600,000. Meanwhile, Muslim consumers spent $100bn on pharmaceuticals last year, which is expected to scale to $106bn this year and total $129bn in 2025. As much as $2bn in halal-related pharmaceutical investments were made in 2020/21. Abu Dhabibased ADQ acquired Egypt’s Amoun Pharmaceutical Company, while Malaysia’s MiCare received $30m in funding from the International Finance Corporation. Simultaneously, Muslim spend on fashion totalled $295bn in 2021, and is forecast to rise to $313bn in 2022, the report added. While modest fashion was garnering traction even prior to the Covid-19 pandemic, the key shift has been into e-commerce. Among notable collaborations, Malaysian brands Mimpikita and CalaQisya partnered with Disney for their modest wear collections. Growing consumer demand for diversity and inclusivity in cosmetics propelled halal cosmetic players. Muslims spent a total of $70bn on cosmetics in 2021, which is anticipated to increase to $93bn in 2025, the study added. Muslim spend on media and recreation also increased by 7.2 per cent in 2021 to equal $231bn. New mobile apps such as ImamConnect and Sango sprung up to cater to Muslim lifestyles, while digital advancements in the regional art scene were also witnessed. Last year, UAE-based Behnood Javaherpour launched the country’s first NFT (nonfungible token) digital Islamic art agency. However, Islamic finance was estimated to value $3.6tn in 2021 and is forecast to reach $4.9tn by 2025, the report added. Global sukuk issuance escalated to $250bn in 2021, according to the Institute of International Finance. Meanwhile, Nasdaq Dubai recorded $11.9bn in new sukuk listings last year. With Muslim spend forecast to reach $2.8tn by 2025, growth across the Islamic economy space appears promising. June 2022
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