The Asia-Pacific (APAC) region is accounting for the largest slice of this thriving market, with Malaysia and Indonesia leading the pack. Although Malaysia is a comparatively small country, with 32.7 million nationals in 2021 (over 60% of which identify as Muslim), its economy is well-developed and the Malaysian halal beauty market is one of the biggest markets in the ASEAN region. Indonesia, on the other hand, is the largest Muslim-majority country in the world with a population of 275+ million and 87% Muslims. In both countries the size of the halal beauty market has been growing strongly in recent years.
Young brands take the Indonesian halal beauty market by storm
According to Sancoyo Antarikso, Chairman of Indonesian Cosmetics Association Perkosmi: “Indonesia is the largest halal consumer market in the world. Consumer spend reached USD 184 billion USD in 2020, of which USD 4.19 billion were cosmetics and toiletries (C&T).” In comparison, the overall Indonesian C&T market is worth around USD 6.34 billion and over the next five years, halal-certified cosmetics are expected to outpace the non-halal beauty market.
“While halal certifications in cosmetics are still lagging behind halal-certified food products in Indonesia, they have been increasing steadily over the last few years. In 2017 there were only 64 cosmetics companies that had a halal certification. This number grew to 129 companies in 2018, 162 companies in 2019 and 214 companies in 2020, including both Indonesian and foreign players,” adds Muti Arintawati, President Director of Indonesia’s Assessment Institute for Food, Drugs & Cosmetics Majelis Ulama Indonesia LPPOM MUI.
One of the reasons for this development is the Indonesia’s halal product law, which applies to cosmetics, foods and non-food products & services and went into effect in 2019. Under this set of regulations all foreign beauty products distributed or retailed in Indonesia will be treated as non-halal unless they’ve been certified in Indonesia or by an accredited foreign certification body. While cosmetics brands have until 2026 to fully implement this law domestic and regional halal beauty brands have long since begun this process.
Indonesia’s established halal brands, like pioneer Wardah, which was founded in 1995 and has a strong distribution across the entire ASEAN region, have been instrumental in driving the domestic halal beauty market. When Wardah was first launched, there were few halal certified brands and even less consumer understanding of what halal was. Over the past 20 years, however, awareness of the “hijab lifestyle” has been growing strongly in Indonesia. And today’s young halal consumers aren’t just looking for a religious certification any more.
Prita Anindya Laksmita, Beauty Sector Manager at Kantar Worldpanel Division explains: “Looking at the growth drivers today, the market isn’t driven by the halal logo per se. Consumers are now also looking for more sophisticated benefits such as brightening or anti-ageing so modern halal beauty brands are dialling up the key ingredients of a product rather than focusing exclusively on the halal seal.”
And indeed, in recent years a crop of trendy, young domestic beauty brands has been brightening up the Indonesian halal cosmetics and toiletries market place. While 15 years ago, halal brands tended to look staid and a bit conservative, the new generation of female-founded beauty brands is in a different league altogether, wowing its digitally native demographic with exciting products and ultra-stylish packaging. Many of these new launches are makeup brands which are actually boosting the entire Indonesian colour cosmetics market: According to GlobalData, the domestic makeup sector is estimated to grow at a CAGR of 5.7% from 2020 to 2025 [3], driven by the certified halal makeup market.
Amongst the biggest beauty labels is BLP Beauty which was launched by prominent beauty blogger Lizzie Parra in 2016 and offers a range of inclusive shades for the many different skin tones of Indonesian women. The products are also light-weight and comfortable to wear in the country’s hot and humid climate. Luxcrime is another beauty brand with a strong GenZ vibe and stylish packaging, as is Rosé All Day launched in 2017, which offers skin care and makeup. Colour cosmetics brand Esqa was launched in 2016 and is both halal and vegan while Mad also caters to the GenZ and Millennials demographic. Face care brand Base, on the other hand, offers personalized skin care: users fill in an online questionnaire and the brand then selects suitable products from the range and ships it directly to the customer.
Malaysian-based halal beauty know-how
As far as halal beauty is concerned, Malaysia isn’t trailing far behind its neighbour. Despite Malaysia’s comparatively small population size, the country is the fourth largest economy in South-East Asia. It is also amongst the top 5 international Muslim consumer markets. The country’s halal authority JAKIM is one of the biggest certifying bodies in the region and over the past decade the Malaysian government has implemented various initiatives expanding and promoting the country’s halal manufacturing eco system, making Malaysia one of the key countries for halal OEM/ODM manufacturing.
According to Alvin Yim from the Malaysian Cosmetics & Toiletries Industry Group, the local trade organization, Malaysia’s halal exports came to USD 7.25 billion in 2020, with C&T products accounting for turnover worth USD 0.64 billion (8.7%). The major exports market for Malaysian halal cosmetics are Singapore (by a very large margin) followed by Turkey, UAE, the Philippines and Japan.
The 2020 result was affected by the pandemic, Yim says, as cosmetics export turnover had been growing strongly from USD 0.52 billion in 2016 to USD 0.71 billion in 2019. However, Yim expects the Malaysian halal beauty exports to rebound and expand further in the post-pandemic period. And the demand is definitely there!
Like Indonesia, Malaysia’s contemporary halal beauty market is driven by the many new and trendy makeup and skin care brands that have appeared on the market over the past five years. These labels are primarily female-owned, proudly manufactured domestically and aimed squarely at the demands of young urban women.
Launched in 2016, So.Lek is a good example of this new kind of beauty brand. Founders Dahlia Nadirah and Luqman Hakim wanted to create an affordable makeup brand celebrating Malaysian culture and traditions rather than giving it the more usual international or anglicized brand vibe. The products and shades of So.Lek’s makeup range are named in Bahasa Malaysia rather than English and even the brand name is based on the Malaysian word for makeup.
Also launched in 2016, Nita Cosmetica has a similar brand ethos. Founder Aznita Azman wanted her makeup brand to represent Malaysian culture and values through packaging and product names. Her brand offers accessible and affordable colours for different skin tones.
dUCk Cosmetics is the sister brand of hijab label dUCk, which was launched by local fashion entrepreneur Valet Vivy Yusof in 2014. After expanding into bags, accessories and other home and lifestyle products, Yusof introduced a halal cosmetics range in 2017 which was the first Malaysian beauty brand to be retailed in Kuala Lumpur’s ultra-prestigious Pavilion Shopping mall.
Millennial beauty brand Oh Most Wanted Cosmeceuticals, launched in 2018 by Malaysian actress Nora Danish, manufactures makeup with functional skin care benefits while Irisa Cosmetics, founded that same year by siblings Iman and Irisa, is offering stylishly packaged lip, eye and brow colour cosmetics.
Velvet Vanity, whose brand founder was 24 when she introduced her brand in 2016, sells a range of fully vegan and halal makeup. Other notable domestic makeup brands include lip colour labels Marcella & Co, Orkid Cosmetics and Pretty Suci. In 2017, Pretty Suci’s two founders launched Malaysia’s first halal beauty online store.
Full steam ahead
The outlook for the halal beauty market in the APAC region is very bright. According to Mulyorini R. Hilwan, Advisor of Halal Audit Services at LPPOM-MUI, the region is set to have 1.5 billion Muslims by 2050 and Alvin Yim estimates that by 2027, APAC will register the highest percentage of the double-digit halal cosmetics market growth which is expected to reach USD 104 billion by 2027. And with so many exciting new regional beauty brands the ASEAN halal beauty market is more attractive than ever.
Interestingly enough turnover of halal beauty has also been growing amongst non-Muslims in APAC as domestic consumers are increasingly turning to halal-certified cosmetics in their search for safe, clean, cruelty-free products. “Halal has become a popular product quality seal,” confirms Kantar Worldpanel’s Prita Anindya Laksmita.
With ingredient safety a major consideration for many ASEAN consumers, this development will further continue to boost the halal beauty market.
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What is halal beauty? Manufactured according to the Islamic Sharia law, halal cosmetics must not contain ingredients that are haram (forbidden) by Islam, such as alcohol or GMO ingredients, components sourced from the human body, from animals that are forbidden by Sharia (such as pigs) or from animals that have been slaughtered in a non-halal way. The cosmetics cannot be manufactured in a facility that also handles non-halal products (this also applies to product storage, packaging, display and shipping) or processed with non-halal machinery and equipment. While this might seem straightforward enough at first, it becomes more complex with beauty and personal care. Face creams often have 20+ ingredients including actives and compounds which are sourced from different companies and regions. To certify a product halal the source of each cosmetic ingredient must be demonstrably free of non-halal components. For example, cosmetic actives cannot contain placenta, albumin or keratin components derived from humans or from incorrectly slaughtered animals, whilst the culture, media and additives used in the manufacturing of other typical beauty ingredients such as enzymes, proteins, ferments or even AHAs must also be certifiably halal, i.e. containing neither non-halal components nor having been produced in a non-halal facility. Products such as colour cosmetics, sun screens or body lotions also need to be water-permeable to allow for the ritual wudhu washings, so “water-proof” and “water-resistant” claims can also be tricky. Since there is no global halal authority or certifying body and each Muslim (or Muslim-majority) country has its own halal regulations (and domestic certifiers), a halal certification gained for a particular regional market might not be recognised in another Muslim country. However, the certifying authorities in the bigger halal markets, such as Malaysia or Indonesia, usually acknowledge certain foreign halal certifiers although products will still need to be officially registered in the target country. |
