Finding the ways to conquer the Halal market

Enterprises introduce products to Muslim customers. Photo: ST

Great potential but many barriers

With great advantages in exporting agricultural and aquatic products, and being located near major Halal markets in Asia - where about 62% of the population is Muslim, more and more Vietnamese enterprises are interested in exporting goods to this market. In particular, the level of consumption and use of Halal products tends to increase, expanding to non-Muslim markets because Halal products meet many criteria on food safety, quality and environmental protection.

Ms. Wong Chia Chiann, Consulate General of Malaysia in Ho Chi Minh City highly appreciated the potential of Vietnam's food exports to the Muslim market, even though the number of Muslims in Vietnam was less than 0.1% of the population. Ms. Wong Chia Chiann cited Australia's story when only 3.5% of the country's population was Muslim, but in 2021, the value of Australia's Halal meat exports had reached US$ 2.36 billion. Currently, Australia was also one of the top 4 Halal exporters to the Middle East region and countries of the Organization of Islamic Cooperation (OIC).

However, Mr. Nguyen Tuan, Deputy Director of the Investment and Trade Promotion Center of Ho Chi Minh City (ITPC), said that the export of food by Vietnamese enterprises to the Halal market has just been the beginning. Every year, the country had about 50 companies that were certified Halal with the main products as seafood, beverages, canned food, confectionery, vegetarian food and pharmaceuticals.

Ms. Ly Kim Chi, Chairman of the Ho Chi Minh City Food Association also pointed out that Halal standards and regulations were increasingly strict, Halal certification was not valid forever, not equally recognized in all countries, for all products. This caused a lot of difficulties for enterprises because they had to re-certify many times and had to base on each export market to register for certification accordingly.

Mr. Haji Machdares Samael, acting chairman of the Ho Chi Minh City Muslim Committee, said that Halal was initially only applied to cattle and poultry meat. Specifically, the Qur'an teaches about the principle that Muslims can and cannot eat kind of animals, how to kill. Today, Halal s expanded to all kinds of foods such as milk, cakes, candies, ready-to-eat foods, food, beverages, cosmetics, pharmaceuticals, tourism, hotels... Notably, products that were previously not subject to Halal standards but had recently forced to meet this standard such as farmed seafood, agricultural products, tea, coffee... are In some places, water used to process Halal’s products was also required a certification. Therefore, Halal now was not only religious elements or food safety and hygiene but also Islamic identity and brand elements.

“Hallal standards are increasingly perfected, expanded to many product groups and are tightened on quality, including farmed aquaculture products, tea..., will have an increasingly profound impact on Vietnam's export goods and services”, said Mr. Haji Machdares Samael.

Promoting the Halal Ecosystem

Mr. Haji Machdares Samael assessed that the determination of Muslim countries to systematize Halal standards, on the one hand, created barriers for goods exported to these markets, on the other hand, it would create opportunities for enterprises which were agile, took advantage of opportunities and adapted to the new context. In addition to being properly and fully aware of the Halal market, it was necessary to have good preparation from both government agencies and businesses to overcome challenges and not miss the opportunities offered by this market.

According to Mr. Haji Machdares Samael, over the past time, many countries that had Halal markets or exported goods to the Halal market had quickly established state management agencies in charge of building Halal standards and Halal certification systems. Indonesia, Brunei, Singapore and Thailand had rapidly developed their own Halal standards systems.

Countries in the Middle East in the last 10 years have also invested heavily in the development of the Halal standard system because it is considered to become the center of the Halal market in the near future instead of Southeast Asia. Some countries with Muslim minorities have also established Halal State management agencies and Halal standards systems to serve export purposes such as Australia and New Zealand.

Meanwhile, Vietnam does not have a state agency certifying Halal standards, there are a number of private organizations that issue Halal certification. Because there are many Halal standard systems in the world, Vietnam's Halal certification organizations are forced to work with many Halal certification organizations of other countries to be accepted for Halal certification, which increases the cost of certification. Those costs are ultimately borne by Vietnamese exporters to the Halal market, thereby reducing the competitiveness of Vietnamese exports.

Besides, for various reasons, Vietnam's Halal certification organizations have not yet approached the increasing requirements of the world Halal industry.

In order to develop the Halal ecosystem in Vietnam, Ms. Wong Chia Chiann suggested, in the short term, Vietnamese enterprises should to recruit Muslim personnel and experts to develop Halal policies, internal Halal committees and monitor the Halal process. Accordingly, Malaysia could cooperate to provide experts for Vietnamese enterprises. In the long term, Ms. Wong Chia Chiann said that enterprises should train domestic personnel and experts on the Halal certification process, especially in the Muslim community. “Malaysia is willing to share its experience in building a better Halal ecosystem in Vietnam”, emphasized Ms. Woong Chia Chiann.