Malaysia's strategic edge: dominating the global halal hub

Malaysia stands out as a global leader in the halal market, leveraging its strategic geographic location and rich demographic diversity. According to the Global Islamic Economy Index, Malaysia ranks #1 among 81 countries for the 10th consecutive year, highlighting its preeminent position in the halal industry.

As the global halal market continues to expand, Malaysia’s position at the heart of Southeast Asia offers unparalleled advantages. The country's robust halal certification system, recognised worldwide, ensures that halal products meet the highest standards of quality and compliance. This, combined with Malaysia’s commitment to fostering the halal economy, has solidified its status as a halal hub.

The growth of the halal industry in Malaysia has significantly strengthened regional economic ties. By positioning itself as a central player in the global halal market, Malaysia has fostered economic partnerships with neighbouring countries, such as Indonesia, Singapore, and Brunei. These collaborations not only enhance Malaysia’s economic standing but also promote the halal industry across Southeast Asia, creating a cohesive and competitive regional market.

1. Malaysia’s halal management systems

Malaysia has established a robust halal management system that is recognised globally for its stringent standards and comprehensive approach. The country's commitment to maintaining high-quality halal standards has cemented its reputation as a leading halal hub, ensuring the integrity of halal products and services across various sectors. Explore the core organisations and initiatives below:

Jabatan Kemajuan Islam Malaysia (JAKIM)

Jabatan Kemajuan Islam Malaysia (JAKIM) is the key government-recognised body responsible for issuing halal certification in Malaysia. JAKIM's certification is based on halal standards developed in collaboration with the Department of Standards Malaysia. These standards cover a wide range of sectors, ensuring that halal principles are adhered to across various industries.

Fifteen standards have been developed for the halal sector, including food and beverage schemes, pharmaceuticals, logistics, packaging, cosmetics, fashion, and Muslim-friendly hospitality services. JAKIM's rigorous certification process ensures that products and services meet the highest halal standards, fostering trust among consumers and enhancing Malaysia’s reputation as a halal hub in the global market.

Halal Development Corporation Berhad (HDC)

The national halal ecosystem is further bolstered by the Halal Development Corporation Berhad (HDC), which plays a pivotal role in developing the halal industry. The HDC is tasked with developing and promoting the halal industry, not just limited to food like meat but also encompassing other products such as cosmetics and pharmaceuticals.

Additionally, the HDC plays a crucial role in the development of halal services, including banking and takaful (Islamic insurance). By providing a comprehensive framework for the halal industry, the HDC supports Malaysia’s efforts to be a leading global halal hub, ensuring that all aspects of halal compliance are met across various sectors.

Global Halal Summit (GHaS)

Launched in September 2023 in Kuala Lumpur, the Global Halal Summit (GHaS) aims to complement Malaysia’s halal ecosystem and economy. GHaS 2023 is designed to maintain the momentum of the halal industry by providing new opportunities and promoting Malaysia’s halal reputation on the international stage. The summit is part of the government’s ongoing efforts to enhance and sustain the country’s leadership in the halal market, fostering innovation, collaboration, and growth within the halal sector. GHaS serves as a platform for stakeholders from around the world to discuss, collaborate, and advance the global halal industry, reinforcing Malaysia’s position as a central hub for halal products and services.

2. Enhancing halal trade within ASEAN

One of the primary obstacles confronting the region pertains to the absence of uniformity in halal certification and accreditation. The ASEAN Working Group on Halal Food (AWGHF) addresses this challenge by providing a mechanism for cooperative undertakings among ASEAN Member States (AMS). This group focuses on developing and harmonising halal food standards, certification, and accreditation, as well as conducting capacity building and exchanging information on halal food development and best practices.

Malaysia leads this front due to its comprehensive halal certification standards, which are widely recognised and respected. To protect the Halal Malaysia brand as a highly valuable intellectual property, JAKIM has taken the initiative to register this trademark outside the country through Sirim Berhad. For the first time, foreign industry players can directly apply to JAKIM for Malaysian halal certification through the latest initiative – International Direct Application for Malaysian Halal Certification. To date, the halal Malaysia trademark or logo has been registered and used in 46 countries, including Singapore, Indonesia, Brunei and Thailand, as well as those outside of the ASEAN region.

The integration of Malaysia’s halal certification standards into regional trade has enhanced product integrity and streamlined cross-border transactions. This harmonisation of standards simplifies the import and export processes, making it easier for businesses to trade halal products within ASEAN. By providing a reliable framework for halal certification, Malaysia supports the growth of the halal market, ensuring that products meet stringent quality and safety requirements.

3. Leveraging economic synergies for halal market expansion

Collaborative initiatives and agreements between Malaysia and its neighbours have been instrumental in expanding the halal market. Joint ventures and partnerships have created new opportunities for businesses to tap into the growing demand for halal products.

In fact, there are plenty of successful cross-border halal ventures that further highlight the potential for economic synergies. One such example is the collaboration between Funding Societies, a Singapore-based digital finance platform, and HDC to develop and enhance financing access to halal small and medium-sized enterprises (SMEs). Another notable venture is the joint effort in halal tourism, where Malaysia is set to develop a common framework with Indonesia and Thailand, ensuring that Muslim travellers receive consistent, high-quality services that adhere to halal standards.

These partnerships demonstrate the strength of regional cooperation in the halal industry, showcasing how collaborative efforts can drive growth and innovation, ultimately benefiting all parties involved and boosting the global halal economy.

4. Engaging with Malaysia’s halal market

For businesses interested in entering the halal market in Malaysia and the broader ASEAN region, there are several practical steps to follow. First, understanding the halal certification process is crucial. Companies must ensure that their products comply with JAKIM's stringent standards to obtain halal certification. This involves rigorous inspections and adherence to halal principles throughout the production process.

Additionally, businesses should seek partnerships with local companies that have experience in the halal market. These collaborations can provide valuable insights and support, helping foreign companies navigate the complexities of halal certification and distribution. Organisations such as the HDC and the Malaysian Investment Development Authority (MIDA) offer resources and guidance to businesses looking to enter the halal market.

Unleash Malaysia's potential in the halal industry with DHL Express

Malaysia’s strategic importance as a halal hub in Southeast Asia cannot be overstated. The country's geographic and demographic advantages, combined with its robust halal certification system, position it as a leader in the global halal market. Businesses looking to tap into the growing demand for halal products can benefit from Malaysia’s economic partnerships and collaborative initiatives with neighbouring countries.

By leveraging the economic and geographic synergies of Malaysia, businesses can effectively expand their reach in the halal market. The support of international couriers like DHL Express, which offers expert handling and shipping tailored to the delicate nature of halal products, ensures timely and efficient delivery to global destinations. Embracing Malaysia’s strategic position and utilising its resources can pave the way for sustainable growth and success in the burgeoning halal economy.