This paper outlines the international halal cosmetic and personal care market and discusses a number of important issues. After a brief estimation about the size of the international halal market, elements of the Tawhid are applied to cosmetic products and the organizations that would manufacture and market the said products. This paper concludes by highlighting some of the issues that must be resolved for consumers to trust the integrity of halal cosmetics in the future.
At a time when many markets are reaching saturation point Muslims are becoming much more concerned consumers, creating some of the fastest growing consumer segments in the World. This represents a major growth opportunity for cosmetic and personal care companies. Halal products are very quickly entering the mainstream markets within Europe and the United States. In addition the “Halal” concept is becoming much more sophisticated in the Middle East and some Asian countries. Muslim consumer Halal awareness has widened from being concerned with meat based products a decade ago to a wide range of products today. Muslim consumers are seeking Halal integrity of processed foods, beverages, pharmaceuticals, insurance, travel, leather products, and even entertainment. This has also spread to a growing awareness about cosmetics and personal care products, where recent research has cited that more than 20% of Muslim consumers are concerned about Halal issues with the products they are using.
Halal personal care products in the market today include hair shampoos, conditioners, bath and shower gels, cleansers, creams, lotions, talc and baby powders, toners, make up, perfumes, eau de colognes and oral care products. In contrast to personal care, cosmetic market growth is not uniform and slightly slower than personal care segments as modesty has an important influence on Muslim female consumers. However this varies according to the country and upbringing where some women wear a full length style robe and veil while others do not.
There are various estimates about the current size of the Halal cosmetic market ranging from USD 5-14 Billion sales per annum. These estimates probably vary due to the different definitions given to what constitute Halal products where in some markets particularly in countries like Indonesia and Malaysia all products have been considered Halal due to their predominately Muslim populations. About half these sales are in the Middle East, with USD 2.1 Billion sales in Saudi Arabia alone. Although per-capita consumption rates are not as high in other “Islamic” markets, sales are growing around 15% per annum according to the author’s own estimate. Halal or Islamic cosmetics are now available in many places, including onboard sales on Saudi Airlines, supermarkets (including Europe and US), specialty Halal shops and widely through the internet. Some manufacturers have integrated the concepts of Halal, Organic and Fairtrade into their products in the European market.
Given that one person in five is Muslin in the world and Muslims in Western countries are
becoming more aware of Islamic teachings, the Halal cosmetic market should continue to
grow solidly. There are two major parts of the potential certified Halal market, country markets where the Muslim population make up the majority and country markets where Muslim consumers are a minority group. This represents around 20% of the World population. The major countries in these two markets are shown in the following two tables.
Table 1. Markets Where the Islamic Population is the Dominant Group (Ranked by Muslim GDP at Purchasing Price Parity)
|Rank||Country||Total Population||% Muslim Population||Muslim Population||Muslim GDP USD (PPP)||GDP Per Capita USD (PPP)|
|4||Saudi Arabia||28,146,656||100%||28,146,656||564.6 B||23,243|
Table 2. Markets Where the Islamic Population is a Minority Group
(Ranked by Muslim contribution to GDP at Purchasing Price Parity)
|Rank||Country||Total Population||% Muslim Population||Muslim Population||Muslim GDP USD (PPP)||GDP Per Capita USD (PPP)|
The markets listed in the Table 1 vary greatly in the stage of development and are relatively heterogeneous due to differing individual country tastes and preferences, although specific markets will tend to be homogeneous due to similar cultural, historical and social consumption traits. Markets like Indonesia, Pakistan, Bangladesh, Nigeria, Iraq, Sudan, Uzbekistan, etc, have low per capita incomes, where aggregate consumption of many consumer items would be very low, until some further development takes place. Despite the relative affluence of the UAE and other Arab Gulf States, in some cases supply chains are still typically third world. In Asia, rural and urban populations have vastly differing aspirations and values, and South Asian Muslims speak a multitude of different languages and practice different customs. We also see the Muslims of Northern Africa are vastly different in dress and custom from the Muslims of Turkey and Iran for example. Some Muslims identify stronger to Western values than others, therefore different markets will have different needs.
The major countries where the Muslim population is the minority are also potentially substantial markets for Halal certified products, representing large market segment potentials (Table 2.). The US, Russia, China, France and Germany rank among the top Islamic economies according to aggregate Islamic GDP figures. Recent reports indicate that Halal sales in the US are increasing around 80% per year, where a number of new retail outlets specializing in Halal products are increasing. A&P, Loblaws, Food Basics and Wal-Mart are allocating space for Halal products in their stores. Many of the other countries down the list represent very small markets. However, in Europe and the Middle East per capita consumption of cosmetics is high. Possibilities exist that in some countries there may be potentially lucrative niches.
There is one important point that should be made here. Islam has no geographical boundaries, thus diversity rather than homogeneity is the key to this market where faith is the only common bonding factor. Even as Muslims lean towards Western style consumption and lifestyles, they are embracing their faith with much more reverence than perhaps previous generations that had to struggle to survive. Muslim obligation under the Tawhid (the relationship between man and God) is something that enters into everyday life and as a consequence, Muslim consumers are seeking products and services that are Syar’iah compliant (the path shown by God). However on the other hand, some research shows that approximately 20% of Muslim consumers do not look for Halal certifications when purchasing a product and that the majority of consumers will buy products that do not have the logo if there are no alternatives . More research is required in this area.
Any company that wishes to enter the halal cosmetic market must not only brand their products as such, but integrate their organization with the philosophy of Tawhid (see figure 1.). Central to Islam is Tawhid “…a man’s commitment to Allah, the focus of all his reverence and gratitude, the only source of value. What Allah desires for man becomes value for him, the end of all human endeavour.” Tawhid is the Islamic way of life, the fundamental of all Islamic civilization, which is process, means and end together. Tawhid is both the essence of the individual and the society he or she lives in. Tawhid is acceptance of one creator and His divine guidance of humanity. Tawhid implies both the mission and morality of humankind in both social and spiritual contexts.
Mankind’s responsibilities under Tawhid fall into two categories, fard’ain which is an individual’s obligation to perform his or her religious duties and fard kifayah, which is an obligation for man to serve the entire community, through services to each other, necessary for the community to live safely and comfortably. Thus the obligation to improve the Muslim Ummah (community) falls under fard kifayah, where undertaking business is the principal method of improving the economy and community;
“Be involved in business as nine out of ten sources of income lie in business”
The building blocks of Tawhid are the concepts of al-iman (belief), al-ilm (knowledge) and al-amal (pious acts and efforts). Al-iman is the belief in the existence of one God and Creator, with a commitment to His teachings and revelations, revealed through the Al-Qur’an, and Prophets, through the Hadĭths and Sunnah (What the Prophet Muhammad (S.A.W.) said, did, agreed or disagreed to). Our faith in Allah (S.W.T.) is reflected in our daily behavour, influenced by our moral system formed and contained within us. It is our inner self;
“Faith is not expectations and not outward ornamentations, but implanted in the heart and realized through actions.”
(Ibn Najjar & Dailami)
Al-iman is deepened by al-ilm, which is the responsibility of all Muslims to seek in order to fulfill and perform al-amal. Knowledge (spiritual, wisdom and scientific) is the foundation of all acts of al-amal which would be futile and unproductive without the search for further knowledge to enhance the wellbeing of society. Islam places great importance on scientific discovery, knowledge and wisdom to develop civilisation. Al-iman and al-ilm manifested through al-amal is the basis of the advancement of civilization for the benefit of humankind and the Ummah (Muslim community), in particular. This is undertaken under the principal of ad-din, mentioned above, which is referred to as ibadah.
In Islam a person, who of faith, knowledge and pious devotion, manifested in effort and acts, using reason and experience and adheres to the teachings of the Al-Qur’an and Prophets is a person of Taqwa, adhering to the philosophy of Tawhid. He is fulfilling his purpose on earth to perform ibadah to God, through obedience (ta’ah), which conforms to his true and essential nature (fitrah) of man. This relates man to God through everything an individual does, including spiritual duties, thoughts, actions and deeds to other people.
As man operates in a social environment, Islam prescribes a number of forms of business organization, through which his obligations can be fulfilled. A mushharakah can take a number of forms;
a) Mudarabah: Partnership where one manages the partnership and another supplies the financial support,
b) Shirkah: where two or more individuals pool financial resources and share profit and loss on an agreed ratio and held liable to the extent of their capital, and
c) Syari’ah: each partner is able to operate other businesses, independent of the principal business.
Such business organizations are founded and operated on the principal of al-ta’awun (mutual assistance and cooperation) among members of a society for both their mutual benefit and that of a society as a whole.
Islamic business is governed by the rules of syar’iah, the path by which all Muslims should follow. The syar’iah is the divine law that establishes the standards of justice and human conduct, as well as what is permitted and prohibited in action. The syar’iah is based on the Al-Qur’an, Sunnah and interpretations by Islamic scholars. Some Muslim scholars have stated that these standards are beyond human and are a goal or path of guidance, where others see these utopian ideals as mandatory for advancement of the community.
Central to the Syar’iah are the concepts of Halal and Toyyibaan, which govern all the economic activities of man in production and consumption of wealth, where certain means of gaining a livelihood are declared unlawful. Halal means lawful or permitted for Muslins, a concept that is much wider than food issues. It concerns whether operations and procedures are undertaken according to the Syar’iah. Toyyibaan is an even wider concept than Halal, which means good, clean, wholesome, ethical in the Islamic concept. Under the concept of Toyyibaan, food and other products must be clean, safe, nutritious, healthy and balanced. Toyyibaan would also mean that agriculture must be undertaken within a sustainable regime of practices, raw materials should be produced sustainably, and business should be done with good intentions. Therefore in the strict sense of these concepts Toyyibaan influences management styles, human resources policies, business ethics, raw material selection, and manufacturing methods. This means that entering the Islamic market requires a company to take a holistic approach to comply, not just the launch of a new product or brand.
Increasing market internationalization means that new product choices are available to consumers from companies and service providers which consumers do not know and are yet to trust. Many products utilize animal based product formulations, which may or may not have been slaughtered according to Islamic law (see table 3). This causes much uneasiness among many Muslims as they feel they are violating Islamic teachings by using such products. In addition, through advances in biotechnology, new ingredients are being formulated into products where Halal status is unknown. It is important to the majority of the Muslim community that some system is in place to assure them that the products they purchase and consume are lawful under Islam.
Table 3. Some raw materials that are of concern to Muslim consumers
|Sometimes used as a coagulating agent and protein in products and usually derived from egg whites.|
|Sometimes used in creams and lotions as a wound treating agent and derived from uric acid from cows and other mammals.|
|Used as warm fresh sea-like notes and fixative in some fine fragrances and derived from the intestines of whales|
|Used as ascetic ingredients (protein builders in nature) in shampoos and sometimes derived from animal sources.|
|An unsaturated fatty acid used in some skin creams and lotions as an eczema and rash soother and derived from animal livers.|
|A steroid alcohol found in all animal fats and egg yolks sometimes used in eye creams and shampoos, etc.|
Collagen & Elastin
|Proteins derived from animal tissues.|
|A sulphur containing amino acid used as a nutritional supplement, in emollients, hair treatment, and anti-aging products, derived from animal sources.|
|Alcohol which is forbidden to be consumed in Islam. It is widely debated whether alcohol should be allowed in personal care and cosmetic formulations.|
|Thickener & emulsifier used in shampoos, facemasks, and other cosmetics, derived from cow and pig ligament, skin and bones.|
|A by-product of soap manufacture used in cosmetics, toothpastes, soaps, ointments, and medicines, of concern when derived from tallow based soaps.|
Hydrolysed animal protein
|Sometimes used in shampoos and other hair treatments.|
|A protein used in shampoos, hair rinses and permanent wave solutions derived from hooves, horns, feathers, and hair of various animals.|
|Used a preservative in the formation of plasticizers derived by bacterial fermentation of sour milk, etc.|
|An emollient used in skin care products derived from wool.|
|Used in shaving creams, soaps, and cosmetics and derived from hog fat.|
|Used in eye creams, lipsticks, hand lotions, soaps, and shampoos, being derived from either egg yolks or soybeans.|
|An acid used in shampoos, creams and cosmetics which can be derived from both plants and animals.|
Tallow and tallow fatty acids and alcohols
|Used in cosmetic and personal care formulations as surfactants and usually derived from animal fat.|
|Used in cosmetics and personal care products and can be derived from both plant and animal sources.|
There are a number of ingredients which Muslims cannot consume in any form, which include;
a) Pork or pork by-products,
b) Animals that are dead or dying prior to slaughter
c) Blood and blood by-products
d) Carnivorous animals
e) Birds of Prey
f) Land animals without external ears
g) Alcohol, and
h) Animals killed in the name of anything other than Allah (God).
Muslims living as a minority in a non-Islamic society have a number of problems identifying what items are Halal and Haram (forbidden in Islam), without product certification. For example, gelatine, lard and tallow can be either in a Halal or non-Halal, depending upon the source and method of processing. Cross contamination is a major problem in stores and particularly restaurants, where pork is also served. Therefore from the Muslim consumer standpoint; 1. Products must be produced without any forbidden ingredients, 2. Products must be proved to be in the interests of the consumers’ health and wellbeing, 3. Products must be clean and hygienic, have supply chain integrity, 4. Products must benefit those who produced them, 5. Products must benefit the community they came from and 6. Products and the materials that make up these products must be traceable from the origin, to have total confidence (as shown in Figure1.). An emerging industry of Halal certification bodies has been created to attempt to verify these issues.
Methods of discovering “Haram impurities” in products are rapidly improving. Now the type of animals raw materials are derived from can be identified using Polymerase chain reaction (PCR) which greatly improves the potential for Halal integrity, allowing the development of Halal supply chains and product tracking. The Halal certification process involves;
a) Halal accreditation should be done with an Islamic Association with a good international reputation,
b) All processes must comply with requirements under the Syar’iah
c) All ingredients must be checked as to their suitability to be certified Halal. All ingredients must be certified Halal before the product can be certified Halal
d) Any Haram (unlawful products) must be processed in separate facilities and never come into contact with Halal certifiable products.
e) Halal and products considered Haram can never be stored together.
Supply Chain Development
Thailand is taking the lead with their world class Halal Science centre at Chulalongkorn University in Bangkok established in 1994. The centre focuses on developing standards, Haram ingredient detection for certification purposes, production system development with a Halal-GMP/HACCP framework, and consumer information services as well as research. The Halal centre has recently developed a completely integrated approach to Halal integrity through a supply chain integration system with a positive Halal ingredient list, a procurement and manufacturing procedure certification and supply chain tracking system called HAL-Q, converging GMP, HACCP, Halal, and Toyyibaan into a single set of procedures. These advances will solve many Halal integrity issues now allowing much easier world trade with a trusted certification and tracking system.
In Islam, the individual’s vision, mission and objectives in business is to achieve both success in this world and the hereafter. This is al-falah. Islam puts very little restriction upon the scale of worldly success, except specifying, it must be reasonable, provides the comforts of worldly life, with consideration to the poor and suffering, and within the balance of worldly and spiritual life. Mans success must also serve the legitimate needs of the ummah. This is in great contrast to the singular objective of profit maximization in contemporary business thinking.
Allah (S.W.T.) equipped man with the faculties of understanding right and wrong, so that he may obtain a bright destiny. Man has a free choice in what he chooses. Opposition and straying from his true nature (fitrah) will bring discord to the individual where negative attributes will distort his true nature, which could lead him into doing evil deeds. The individual has his al-iman and al-ilm to keep him from this path of self destruction (al-fasad), which would manifest itself through nepotism, favourtism, envy, greed, corruption, injustice and ignorance. This in Islam is the influence of satan, manifested in many different ways to man to lure him away from God’s chosen path for him. Man becomes unfocused through ignorance and lack of knowledge.
Achieving al-falah means that man has lived up to God’s trust placed upon him, through performing his ibadah, while obeying all the laws of the syar’iah. This is where man has overcome his weaknesses in the service of Allah (S.W.T.) through righteous deeds (amal), in his obligation of fard kifayah. Man has reached the state of amanah, fulfilling the trust God has put in him.
Islam also specifies the way organizations should be operated and managed. As discussed, an organization must base all its work on al-amal and ibadah with the overall management objective of achieving al-falah for the organization as a whole and each individual within it. This is based upon a foundation of al-iman and al-ilm, within a civilization based upon a tawhid philosophy, so that employees have the opportunity to achieve taqwa and avoid straying towards the state of al-fasad. Central to achieving this are the concepts of shura (participation in decision making and community learning) and adab (justice and rights).
Shura is total organizational community participation in decision making to ensure an organization gets the best views, is creative, to develop employees understanding of decisions made, to achieve better implementation of decisions and strengthen the Islamic fraternity. Shura is can also be seen as a organizational control mechanism to prevent management and individuals within the organization from straying down the path of ignorance, greed and oppression, so that the organization can continue to serve its members and the wider community and thus sustain itself. Shura creates a positive learning environment within and organization, similar to the concepts of learning organization discussed later in this section. The Al-Qur’an states that the concept of shura is mandatory upon an organisation.
An organization should build its foundations upon the basic principles of human rights in its administration based on the concept of adab. Adab is based on the existence and recognition of Allah (S.W.T.) and recognition of his commands and laws (syar’iah). Within an organizational context, adab persuades man to do good and avoid evil (al-fasad), in accordance with the nature of man (fitrah) and nature of his action (al-amal). Adab comprises four major responsibilities, 1. responsibility to God, 2. responsibility to oneself, 3. responsibility to society and other human beings, and 4. responsibility to the universe and other creatures. This must all be incorporated into company competencies and the creation of a supply chain that may create new value to the firm. Some of the issues that a firm must consider when developing internal competencies and a supply chain are depicted in Figure 2.
In a world that is becoming more spiritually conscious, awareness of Halal cosmetics is still low within the Muslim community. Muslim consumers are increasing in affluence and beginning to focus upon their religious obligations that demand for Halal cosmetics is set to increase exponentially. Muslim consumers would be expected to exhibit strong loyalty to trusted Halal and Toyyibaan certified products over non-compliant products based on behavior in other Muslim markets. In addition to Syar’iah compliance, Halal products will require brand building. However, how this will be done within an industry depending on glamour as a brand attribute to an overly modest set of consumers, still remains to be seen.
What is also important here is that Western values are merging with Islamic values in regards to cleanliness, ethics, and community integrity, so products compliant to the Tawhid should also be valued by non-Muslim consumers.
Halal issues involved with cosmetics and personal care products are far from being totally agreed upon and without skeptical criticisms. For example, there are different schools of thought about whether Islamic teachings prohibit alcohol use on the body outside oral consumption. Not all Muslims are in agreement over this as many of the blogs and comments at the end of online articles show. Advertising and marketing methods are also leading to criticisms as the photo below is ambiguous in what it is actually promoting to the consumer.
As we have seen with the “Arab Spring” Muslims in many countries are now engaging in debate about what form of society and government they should have in the future, where interpretation of religious doctrine and openness to outside influences are being redefined as we write. There is little doubt that the control of outside influences will be less than before as satellite TV and the internet are being freed up. How this equates to the future demand of cosmetics and awareness about composition is yet to be fully known. However one thing is certain, the Muslim market will gradually represent 15-20% of the total market – something that cannot be ignored.
As a final word, the objective of this article was to skim through some of the issues related to the market, supply chain, and ethical issues concerning Halal cosmetics and personal care products in the market today. The intention of the author is to point out that another new and potentially substantial market segment is growing and should be taken seriously, not necessarily for market positioning purposes, but at least for consideration in ingredient selection and product certification.