Halal Cosmetics with Paul Cochrane, DinarStandard
With a global population of over 1.8 billion Muslims, the halal cosmetics industry is growing at a rapid pace. Awareness of this particular beauty movement is expanding, with brands seeking halal certification for their cosmetics and personal care products as a way to cater to their Muslim consumer-base.
Asia Pacific has been seen as the core of the halal cosmetics movement, although it is expected that western countries will start to pick up on the trend. We talked to Paul Cochrane, Senior Associate at the DinarStandard, to get his expert take on the future of the halal cosmetics industry.
Could you provide a brief then/now overview of the DinarStandard report last year versus this year – any key differences in the halal cosmetics industry?
Over the past year the halal cosmetics sector has developed significantly; new start-up cosmetics players are emerging, and the sector is diversifying in terms of its offerings. From product line-ups and wider portfolios, to products geared towards Muslim women. For example, the Modbeautykeeper, which protects hijab wearers’ scarves from getting covered in makeup during application. This is indicative of more innovation and the maturing of the halal cosmetics sector.
There has been particular growth in Southeast Asia, especially Indonesia and Malaysia, but South Korean and Japanese brands as well as OEM companies are also gaining halal certification.
How has COVID-19 affected the halal cosmetics industry?
It has been tough for newly launched brands that were dependent on bricks-and-mortar retail outlets to introduce their products to clients and gain visibility. However, for both new and more established players, being able to utilize social media and e-commerce to drive sales has kept companies in the proverbial game.
One notable trend is that the pandemic has driven demand for locally sourced products, with consumers wanting to support local and/or regional brands. Halal cosmetics companies that have a strong social media presence, particularly on Instagram, have benefitted from this trend, notably in Southeast Asia. In marketing campaigns, companies have also emphasized their diverse appeal to all women and that ‘all lives matter,’ in response to the Black Lives Matter demonstrations in the USA.
Halal cosmetics brands have also released new products that cater to the ‘new normal’, such as creams to help skin adapt to wearing face masks. Companies have also developed, and/or marketed products that are in keeping with current beauty trends due to physical distancing and being at home more.
Has COVID-19 affected timings/budgeting for halal certification?
The pandemic has affected certification, which is quite a lengthy process in general, ranging from a year to 18 months plus. Certifiers have not been able to visit facilities, and audits have been delayed. Halal certified companies, in general, have also been impacted by disruptions in sourcing raw materials, while many have had cash flow issues.
Are brands using halal certification as a selling point?
Halal cosmetics brands are emphasizing certification, especially in Muslim-majority markets. But given the trend for natural, organic and cruelty-free certification, the more successful halal cosmetics players are also emphasizing other labels/certification to appeal to as broad a base of consumers as possible, not just Muslim consumers.
Aside from COVID-19, what are the main challenges the industry is facing?
There are still quite a few challenges for halal cosmetics to become more widespread. The first is arguably awareness, with many Muslims still not aware of what halal cosmetics are. Be that knowledge of haram (not allowed) ingredients being used in cosmetics, or the importance of traceability and sourcing of ingredients.
Another challenge is certification. In general, halal certification bodies around the world have focused more on certifying halal food than other sectors, and may not have the expertise or interest in promoting and certifying halal cosmetics. Related to this is that the majority of HCBs are headed by men, and usually over 50 years old, not being in tune with current developments or realizing the opportunity in getting more involved in the halal cosmetics space.
Governments in Muslim majority countries have also not supported the development of halal cosmetics to the same degree as they have other segments of the Islamic Economy, such as halal food and Islamic finance. Financing is of course another issue, as for start-ups generally around the world, with investors not always seeing the potential for investing in halal cosmetics. Another challenge is Islamophobia, with multinational brands not always marketing products as halal, especially in the West, although do so in Muslim-majority countries.
Multinational brands gaining halal certification, or acquiring halal brands, will drive more market penetration and acceptance. Such concerns have resulted in cosmetics companies often emphasizing natural, organic and cruelty-free logos over halal logos. The sector is also facing a challenge from natural and organic products, as Muslim consumers perceive such products as halal, even though certain ingredients may not be.
Further to this, Halal cosmetics are also facing competition from Ayuverdic cosmetics and beauty products. Particularly in India, with the government supporting Ayuverdic products and promoting hostility to Muslims and the halal sector. India has a very large Muslim population, but the possibilities for Halal cosmetics to gain ground in the market have been hindered by political issues and polarization.
Have you seen a key demographic driving the halal cosmetics movement? What are the reasons for this?
Millennials and Generation Z are the key drivers, both in establishing halal cosmetics companies, and the key consumer target market. This is particularly key in North America and Europe. Muslim millennials and Gen Z in Muslim minority countries are finding that their needs, values and ethics are not being reflected in their products, but are finding that there is appeal for these products in global markets.
This trend is also very apparent in Southeast Asia, where it is the young and savvy entrepreneurs and consumers that are driving demand for Halal cosmetics.
Is social media impacting the drive for halal certification and demand for halal cosmetics?
Absolutely, social media is key for driving demand for halal cosmetics. Brands are able to reach more consumers and tailor marketing to their needs, such as in local languages, rather than just in, say, English.
What do you predict for the future of halal cosmetics? Do you see it becoming more mainstream in countries such as the UK/US?
The halal cosmetics sector has grown out of being niche in many markets, but still has a way to go before becoming more mainstream and available, for example in supermarkets and pharmacists, rather than online and in more specialty stores.
Southeast Asia/Asia Pacific has been spearheading development and expansion of the sector, and it will remain the core, key market for halal cosmetics companies. Uptake in the Middle East and North Africa is still low, but will increase as more brands get certification and awareness grows. The same applies to African markets, although sales will be more driven by volume sales than medium to higher priced products due to lower purchasing power.
The US and UK are very important halal cosmetics markets, not just for domestic sales, but also exports. ‘Made in US/UK/Europe’ is a strong selling point for entering Middle Eastern markets, the Gulf in particular, where there is high spending on cosmetics.