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Saudi Arabia’s Neom to promote religious heritage for global tourists

The $500 billion investment into the economic zone and megacity aims to attract 5 million international tourists annually by 2030.

 

Dubai: Marketers for the planned Saudi Arabia megacity of Neom, a key plank in the Kingdom’s Vision 2030 strategy of economic growth and diversity, will highlight the site’s ancient religious heritage and develop adventure tourism to attract 5 million international tourists annually by the new decade.

 

Located in Tabuk Province in the kingdom’s northwest by the Red Sea and Gulf of Aqaba, the $500 billion economic zone is currently owned by the Public Investment Fund (PIF), the sovereign wealth fund.

The development will stretch over 26,500km2 with a projected 1 million residents. Government-backed construction started last October with the authorities hoping the first residents will take occupation in 2024.

“We’re a land of the prophets. Both the Qu’ran and Bible agree the Prophet Moses lived in this area for a decade when he was exiled from Egypt,” Andrew McEvoy, Neom tourism managing director, told the Arabian Travel Market (ATM) 2022 held in Dubai, United Arab Emirates (UAE), in May.

“I like to think Prophet Moses took his inspiration from Neom thousands of years ago. This is a heritage that is untold and worth preserving,” he said.

Neom is also home to two hajj pilgrimage trails, namely the Egyptian Hajj Road and the Syrian Hajj Road, both of which are candidates to be listed as United Nations Educational, Scientific and Cultural Organisation (UNESCO) World Heritage Sites

The routes historically linked Egypt, Sudan and Damascus with the holy cities of Makkah (Mecca) and Madinah. The food and accommodation services supplied Muslim pilgrims with their most basic needs during the long journey.

Beyond its religious heritage, Neom boasts stunning landscapes with mountains reaching 2,500m and topped with natural snow in winter as well as vast stretches of desert. It also has 450km of the Red Sea coastline with vibrant coral reefs and 39 islands, 12 of which sit above the sea year-round and could be developed. 

“We have raw nature that’s authentic, spectacular and undiscovered. One of the fastest growing experiential sectors is adventure travel and Neom has some of the most challenging environments in the world; we have incredible winds for kite surfing and high mountains for mountain sports,” said McEvoy, who is the former CEO of Tourism Australia.

The global market research company Research Dive predicts the adventure tourism market will be nudging $1.8 billion by 2027 from $609 million in 2019. This represents a 15% compound annual growth rate with the Indian-based company expecting the growth to be driven by an escalating interest to explore new places.

 

Read – Tourists flock to Saudi Arabia as the country opens to foreign visitors

Read – Secondary cities, domestic tourism pave the way for a tourism boom in Saudi Arabia


This brings Neom into the frame as the megacity development capitalises on its diverse terrains by blending natural and developed landscapes, while setting global benchmarks for responsible tourism and maintaining cultural heritage. Around 1,200km of trails have already been mapped out.

“Our aim is to go where travellers want to go, particularly post-pandemic. How do we unlock the explorer in all of us? For some young Saudi girls who are colleagues, unlocking the explorer in them was their first-ever snorkelling experience. They had never done it and they were overjoyed,” said McEvoy.

He said for sports gurus the experience might be jumping off a great cliff and paragliding to the ground, adding that unlocking the explorer in each of us “is a highly covetable consumer benefit”.

 

Sunrise over the Sarawat mountains (Shutterstock).

 

Neom builders are already creating nature-based tourist attractions such as Trojena, a destination carved into the Sarawat Mountains running along the country’s Red Sea coast. Scheduled for completion by 2026, Trojena will boast a ski slope, paragliding and mountain climbing, alongside wellness and family-friendly resorts.

“For two or three months each year Saudi Arabia will have a ski village. It’s not in a mall – it’s on a mountain where you’ll be able to ski through the winter and, for the other nine to 10 months, it will be an adventure paradise with mountain biking, rock climbing, hiking, bouldering and other sports,” said McEvoy.

The Neom developers were also constructing a freshwater lake in the mountain that would provide a year-round active place.

“This will probably be one of the most Instagrammed places on earth,” he predicted.

Neom is made up of three main regions: the mountain development of Trojena; The Line as a 160-kilometre-long sustainable city expected to house 1 million residents and Oxagon as a major floating industrial complex hosting food, health, energy, construction, education and other businesses.

The government wants 15 new hotels to be opened in the futuristic city annually between 2023 and 2025, before ramping up the pace to 20 to 30 hotels thereafter. Neom will be subject to the sovereignty of Saudi Arabian regulations; however, it will enjoy some special regulations related to investment, the Saudi Press Agency reported May 16.

“When it comes to the availability of alcohol and permission (for women) to wear swimsuits, nothing’s off the table. In my opinion, if you want to be a competitive global destination, you have to seriously consider that,” McEvoy said, indicating the government will establish a special administration to run the city.

“Neom is literally a country within a country. We’re building our own authority, our own founding laws and, on the availability of alcohol, nothing’s off the table. As we modernise, not Westernise, this will be considered,” he said.

He said for many Saudis, this was a modern country and they did not want to be stereotyped or depicted as Bedouins. That said, the Bedouin culture was “alive and well” in places like Neom.

“Perhaps the biggest asset of all is the Arabian hospitality that’s felt in Saudi Arabia, where visitors are treated as guests and not just as tourists. They will literally give over their house to you – if we can bottle this Arabian service culture, it’s something the world will want to experience,” said McEvoy.

© SalaamGateway.com 2022. All Rights Reserved

Islamic Lifestyle
Newswrap: Islamic lifestyle

Tourism Malaysia inks deal with Expedia; Egypt comes out top in African tourism; Saudi Arabia inks new tourism agreements; Turkey’s tourism sector set for strong growth.

 

Tourism Malaysia inks deal with Expedia

With Malaysia having reopened its borders to tourists, the country is working to bolster visitor numbers, hoping to attract 2 million this year. As part of its strategy, Tourism Malaysia inked a deal with online travel agency Expedia to promote tourism, focusing on Australia, the USA and the UK, reported Free Malaysia Today. The government body is also collaborating with 11 Malaysian media outlets to “produce a series of branded content or niche programmes emphasising the Economic Stimulus Package 2.0 projects and to promote this year’s Cuti-Cuti Malaysia campaign”. Malaysia has attracted 1 million visitors since reopening on 1 April. In 2020, only 4.3 million tourists visited the country due to COVID-19 travel restrictions, down from 26.1 million visitors in 2019.

Egypt comes out top in African tourism

In the World Economic Forum’s (WEF) Travel and Tourism Development Index 2021, Egypt was ranked first in Africa, fifth in the Middle East and North Africa (MENA), and 51st globally, reported Arab Finance. At a global level, the north Africa country rose by eight places from 2019. Egypt hopes to double tourism revenues this year to $12 billion. Operations are to start at Egypt’s new airport, the Sphinx International Airport near the Giza pyramids, in mid-July.

Turkey’s tourism sector set for strong growth

Turkey’s tourism’s GDP is slated to grow at an average rate of 5.5% per year over the next decade, outpacing the 2.5% growth rate of the country’s overall economy, according to the World Travel & Tourism Council’s latest Economic Impact Report. By 2032, tourism could contribute $117 billion a year, equivalent to 11% of the economy. The sector is also expected to create more than 716,000 new jobs over the next decade.

By the end of 2022, the sector’s could contribute $68.5 billion to the economy, with employment in the sector forecast to grow by 4% to reach more than 2.5 million jobs. Tourism generated $78.2 billion in 2019, falling to $36.9 billion in 2020, a 52.8% decline. Half a million jobs were also lost.

Turkey is slated to be the fourth most popular European tourism destination this year, with bookings up 101% from the UK, and by 57%, 28% and 18% from the USA, Canada, and Ireland respectively.

Saudi Arabia inks new tourism agreements

At the Future Hospitality Summit in Riyadh, Saudi Arabia announced several new agreements and partnerships, reported Al Sharq al Awsat. The Red Sea Development Company (TRSDC) announced it signed three new management agreements with international brands, while the Tourism Development Fund (TDF) signed a financing agreement to develop the first Nobu complex in the Eastern Province.

Saudi Arabia meanwhile moved up ten places in the World Economic Forum’s (WEF) Travel and Tourism Development Index 2021, to 33rd globally out of 117 countries benchmarked on 17 pillars, including development and the resilience of tourism industries. Under the kingdom’s Vision 2030, the country aims to generate 10% of GDP from tourism, create 1 million new jobs and attract 100 million visitors.

Islamic Finance
Fintech promises to open up global Islamic finance markets

Sharia-compliant financial technology (fintech) provides opportunities for global growth if regulators and banks can get their heads around the concepts on the table.

 

London: Sharia-compliant fintech is poised for explosive growth across both Islamic and western jurisdictions with Refinitiv expecting the market to reach $4.9 trillion within three years.

The American-British global provider of financial market data owned by the London Stock Exchange (LSE) forecast the growth figures in its Refinitiv Islamic Finance Development Report 2021. The report states Islamic fintech providers were among the standout performers in the sector during 2020 “as regulators have moved fast to facilitate Islamic fintech players and digital banking after years of ‘sandboxing’ and building foundations”.

The Islamic Global Connect Forum Report 2022, published in March 2022 by Malaysian bank Maybank, stated 89% of respondents believe fintech has already accelerated digitalisation of Islamic finance products. They also believe fintech has made them more accessible globally, while improving client experiences.

A month earlier the bank conducted research among 143 Islamic finance professionals across banking, insurance, asset management, asset ownership, private equity, regulation and fintechs.

Zaakira Allana, a Birmingham, UK-based dispute resolution director at international law firm Fieldfisher, said this was important given consumer demand was accelerating Islamic finance fintech from mobile banking to digital lending, trading and cryptocurrency.

She said fintech expansion varied by sub-sector, “but the direction of travel is towards a broader, more inclusive market for Islamic consumers, of which there is a huge global untapped reserve”.

Perhaps unsurprisingly, Middle East and south-east Asian countries with mature international financial systems sport the most Islamic fintech.

According to the 2021 Global Islamic Fintech Report produced by DinarStandard (the parent company of Salaam Gateway) and London-headquartered digital structured finance firm Elipses, Saudi Arabia, Iran, United Arab Emirates (UAE), Malaysia and Indonesia are the leading countries in terms of Islamic fintech transaction volumes within Organisation of Islamic Cooperation (OIC) countries.

The report estimates 241 Islamic fintechs operated globally across OIC and non-OIC countries and that the market for fintech in OIC countries was worth $49 billion. Outside the Islamic finance hotspots, countries with less developed financial systems could be significant drivers for the Islamic finance market if fintechs successfully mobilised their customer bases.

Central Asian fintech

Central Asian countries with large Muslim populations, such as Kazakhstan where around 70% of the population practices Islam, are among those with the greatest potential for Sharia-compliant fintech products to take off, said Marina Kahiani, an Almaty, Kazakhstan-based partner at GRATA International, a law firm with a special focus in central Asia and eastern Europe.

“Kazakh companies are trying to develop Sharia-compliant fintech products. However, they are just at the beginning of the process,” she explained.

In 2019 Kazakhstan unveiled its Islamic Finance Master Plan 2020-2025 complete with developing a fintech hub to support industry innovation. It was coordinated by the Astana International Financial Centre (AIFC), based in the country’s capital Nur-Sultan (formerly Astana).

The AIFC was established in 2018 as a special zone to foster growth in Kazakh financial services companies. Its legal system is based on English law principles rather than Kazakh law – a significant move as the former is less restrictive and has wider international application for transactional rules.

In its fintech section, the Master Plan acknowledges that Kazakhstan financial inclusion is “relatively low” with one key reason being the country’s financial service providers focusing on business and wholesale work rather than consumer products.

According to the plan and data reported by the World Bank in 2017, only 59% of adults (aged 15 years and older) in Kazakhstan hold an account at a formal financial institution. Some of the reasons included a “lack of awareness and understanding on fintech and Islamic finance; lack of funds and disposable income; trust deficit towards the financial system and currency accessibility”.

However, Kahiani notes the stagnation was lifting with fintech products aimed directly at Islamic consumers now being launched in the country. She said successful early movers were those with international partners who had more fintech experience.

“The first digital Islamic card was recently launched in Kazakhstan by Islamic fintech company Tayyab in cooperation with Kazakhstan’s RBK Bank and Visa with Dubai Fintech Ventures as an investor”, said Kahiani.

The Tayyab card, issued to users’ mobile phones when they download the Tayyab mobile app, is fully Sharia-compliant, a status confirmed by the Shariyah Review Bureau of Saudi Arabia. It does not charge interest on customer card balances (haram under Sharia law) and allows users to make contactless payments and instant transfers via Apple Pay and Samsung Pay. Plastic Visa cards can be issued to users on request.

The Tayyab card also allows customers to store funds in four currencies (Kazakh tenge, US dollars, Russian roubles and euros) and withdraw cash from any ATM worldwide. It was also set up to prevent it being used for haram activities such as in casinos and other gambling outlets, alcohol and tobacco stores, bars and nightclubs, through restrictions built into the technology that recognise such transactions.

African fintech

African countries with large populations of young Muslims are also embracing Sharia-compliant fintech. The 2021 Global Islamic Fintech Report noted sub-Saharan Africa and Middle East and north African (MENA) countries (excluding Gulf states) “have gaps” across the nine key fintech services of social finance, insurance, wealth management, deposits and lending, raising funds, payments, capital markets, digital assets and alternative finance.

This indicates “ample opportunities for growth”, said the report.

In July 2021 Nigeria launched eTijar, a Sharia-compliant fintech platform delivering Islamic investment and saving services to Muslims and non-Muslims. According to Bashir Yusuf, founder and CEO of eTijar, when his team began working on the platform in 2018, they identified a major vacuum in the country’s consumer finance market.

“Many young Muslims who are on a good income are not even saving or investing. We had to build the technology infrastructure to allow the younger demographic accessible ways to save and invest their money,” he said, adding the problem was more acute in rural areas, where most people were excluded from financial systems through a lack of knowledge and physical access.

The platform allows users to build investment portfolios from funds screened by eTijar and approved as Sharia-compliant. The platform takes a management fee rather than charging interest on users’ funds.

Yusuf said by cooperating rather than competing with Sharia-compliant fund managers and Islamic banks, eTijar was expanding the market for all Islamic financial service providers.

However, despite generally positive growth, Islamic finance fintech still faces challenges including regulatory barriers especially in Muslim-minority countries. Lingxi Wang, managing associate at UK law firm Foot Anstey, said during an Islamic finance roundtable the firm hosted in 2021, the general consensus was that a significant amount of time and resources were being spent trying to explain to the UK’s Financial Conduct Authority (FCA) how their products fitted into the current regulatory regime.

“This pushes back the initial launch dates. They also found even when being referred to an FCA specialist function, those experts did not have the requisite knowledge and understanding of Islamic finance to provide our panellists with immediate effective solutions,” said Wang.

He said while the FCA accommodated Islamic finance through its current regulatory regimes, creating a bespoke product in the UK required a lengthy statutory consultation process. He contrasted the UK’s approach to Malaysia, a country proactively promoting a strong Islamic fintech ecosystem.

Islamic fintech in Malaysia and the Middle East

In August 2020 the Securities Commission Malaysia announced a collaboration agreement with the Financial Services Authority of Indonesia (Otoritas Jasa Keuangan – OJK) on sharing knowledge about on fintech trends and regulatory developments.

“The UK could learn lessons ... from Malaysia in their proactive approach in creating a regulatory background for Islamic fintech. Also, some aspects of new Islamic fintech may run into problems, especially in non-Islamic jurisdictions,” Wang said.

For example new Sharia-compliant challenger banks and services may not have full banking licences and may need services and funds from conventional banks, thus creating a grey area when it comes to their regulatory and Sharia-compliance obligations.

Another area of confusion is the Sharia-compliant status of cryptocurrency, the lifeblood of some fintechs. In May 2022 Qatar Central Bank released a statement warning the country’s financial services from dealing with unlicensed financial institution or service providers, stressing Qatar currently has not licensed any virtual asset service providers (VASPS) including cryptocurrency operators.

The Maybank report said innovation may provide answers to these problems with regulatory technology being created to deliver robust digital tools certifying compliance with both Sharia and national government requirements through smart contracts on blockchain.

In a 2019 lecture, Fahad Yateem, director, Islamic financial institutions supervision for the Central Bank of Bahrain, explained essentially, regulatory technology and supervisory technology in Islamic finance aimed to enhance the transparency, consistency and standardisation of regulatory processes to promote a proper interpretation of regulatory standards at a lower cost and ensure risk-based supervision for Islamic banks’ regulators.

Examples of Sharia-compliant regulatory technology developers include UK and Jordan-based ICS Financial Systems (ICSFS), an Islamic banking and finance software provider. ICSFS' Islamic software suite is designed to cover all Islamic banking requirements including Sharia law compliance.

In February 2022 Hassan Baan, a member of the International Committee at the Iranian Association of Islamic Finance wrote a blog stating Islamic regulatory technology was “not about regulatory reporting, risk management, identity management and control or transaction monitoring”, but rather about finding “a solution for Sharia-compliance that includes real-time monitoring and tracking of the current state of Sharia-compliance and upcoming regulations in Islamic banks and fintech platforms”.

According to the Maybank report, 34% of respondents believed the impact of regulatory technology on growth would increase dramatically over the next three years, while 47% predicted it would increase slightly.

Should Islamic fintech and regulatory technology combine forces, this important Islamic finance segment may grow even more robustly than projected.

© SalaamGateway.com 2022. All Rights Reserved

Islamic Finance
Newswrap: Islamic finance

Egypt to host Islamic Development Bank Group annual meeting; Qatar and Kazakhstan strengthen financial ties; UAE’s Arada Developments to have first US dollar sukuk; Affin Bank signs partnership with robo-advisory firm; IsDB awards for Impactful Achievement in Islamic Economics.

 

Egypt to host Islamic Development Bank Group annual meeting

Egypt is to host the Islamic Development Bank Group’s 2022 annual meeting in Sharm El-Sheikh from 1 to 4 June, reported IQNA. The theme for this year is “Beyond Recovery: Resilience and Sustainability”, focusing on rebounding from the pandemic and global socioeconomic instability. Senior country representatives of the 57 member Organisation of Islamic Council (OIC) will attend.

Meetings will include the Board of Governors of the Islamic Development Bank, the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), the General Assembly of the Islamic Corporation for the Development of the Private Sector (ICD), the Board of Governors of the International Islamic Trade Finance Corporation (ITFC), and the Board of Governors of the Islamic Solidarity Fund for Development (ISFD).

Qatar and Kazakhstan strengthen financial ties

Qatar Financial Centre (QFC) and the Astana International Financial Centre (AIFC) have signed a MoU to develop cooperation and projects to bolster financial activity, reported The Peninsula. The state-backed QFC attracted 282 new firms to its platform in 2021, reaching 1,284 registered firms and surpassing its target of 1,000 companies by 2022, according to the centre’s website. The AIFC is positioning itself to be a major financial hub in Central Asia, leveraging its position at the geographic heart of China’s Belt and Road Initiative.

UAE’s Arada Developments to have first US dollar sukuk

Arada Developments, Sharjah’s largest real estate developer, is to have debut sale of US dollar denominated Islamic bonds, reported Reuters. The developer has hired Dubai Islamic Bank, Emirates NBD Capital and Standard Chartered as joint global coordinator, and Abu Dhabi Commercial Bank, Ajman Bank, Al Rajhi Capital, Kamco Invest, Mashreq, Sharjah Islamic Bank and Warba Bank as joint lead managers and bookrunners. The dollar denominated sale is slated to be the first in the GCC since Sharjah raised $750 million through a sukuk in March.

Affin Bank signs partnership with robo-advisory firm

Malaysia’s Affin Bank has entered into a partnership with GAX MD (MYTHEO), a robo-advisory service provider, reported Fintech News. MYTHEO is an algorithm-based and automated discretionary investment portfolio management service enhanced by Al. The new service, AFFIN AVANCE, will be a financial and wealth segment for the “mass affluent”. “This partnership, which is our first collaboration of its kind with a robo-advisor, offers an alternative investment option to our new and existing AFFIN AVANCE customers, thus further enhancing our line-up of financial solutions and products offering. Malaysia’s mass affluent category is performing exceptionally well, with an upward growth trend. There is an increasing demand for more convenient avenues to invest,” said Datuk Wan Razly Abdullah, President & Group CEO at Affin Bank. Affin Islamic Bank Berhad is a wholly owned subsidiary of Affinbank.

IsDB awards for Impactful Achievement in Islamic Economics

Three professors won the 1443H (2022) Islamic Development Bank (IsDB) Prize for Impactful Achievement in Islamic Economics, reported MENAFN. Professor Habib Ahmed was awarded first prize, Professor Mansur Masih second prize, and Professor Tariqullah Khan third prize for their significant and influential contributions in the field of Islamic economics and finance. The prize aimed “to recognize, reward and encourage significant knowledge contributions in Islamic economics with the potential to solve major development challenges of IsDB member countries. The prize comes with a $50,000 award for the first prize winner, $30,000 for the second prize, and $20,000 for the third prize.”

Islamic Finance
Pakistan’s Islamic banking sector growing in the double digits

Islamic banking has grown 24% a year over the past decade, according to Moody’s, and is set for 25% growth over the next five years.

 

Pakistan’s banking sector has achieved strong growth over the past decade, driven by the country’s large Muslim population, low financial inclusion rates and more conducive governmental regulations, according to a report by Moody’s Investor Service.

In 2011, Islamic banking assets accounted for 8% of overall banking assets, but have increased by an average of 24% a year, to 19% of total banking assets, at Pakistani Rupees (PKR) 5,577 billion ($31.2 billion). Moody’s expect annual growth of over 25% over the next five years, enabling the sector to take 30% market share.

“We expect growth in Islamic banking to continue to materially outpace conventional banking, reaching a market share of total assets and deposits of around 30% by end 2026, with net financings market share at around 33%. We estimate average growth over 2021-2026 to range between 25%-28% for total assets and deposits, and over 20% for net financings,” said Constantinos Krypreos, a Moody’s Senior Vice President, in a press release.

Deposits have reached PKR4,211 billion ($20.8 billion), equivalent to 19.4% market share, with an average annual growth of 23% since 2011. Net financing has grown faster than deposits, the report noted, at 29% over the past decade, to PKR2,597 billion ($12.83 billion), or a 25.7% market share.

There are 22 Islamic banking institutions in the country, with five fully-fledged Islamic banks and 17 conventional banks with Islamic banking branches. As of December 2021, there were 3,956 branches with an additional 1,442 Islamic banking windows (at conventional branches). Last year, 500 branches were added, with Moody’s expecting similar openings per year over the next five years.

A key driver of growth is the country’s 210 million population, of which 95% are Muslim. According to a 2014 survey by the State Bank of Pakistan (SBP, the central bank), there was strong demand for Sharia-compliant banking by households and businesses.

A further driver of growth has been the country’s low financial inclusion rate. In 2017, an estimated 21% of Pakistani adults had a bank account, according to the World Bank’s Global Findex Database. That number has increased significantly, to 62%, according to SBP estimates, but remains below neighbouring countries, such as India with over 80% having a formal bank account. Digitalisation has been a further boost to improving financial inclusion rates, the report noted.

Government support has helped drive growth in the Islamic finance sector, with the SBP’s five year Strategic Plan, released in April 2021, setting targets for 2025 of 30% total bank assets and deposits, 35% share branch network share, and to provide 10% and 8% of financing to SMEs and the agricultural sector, respectively.

Initiatives include strengthening the legal and regulatory framework, and adopting the standards of the Islamic Financial Services Board, and the Sharia standards of Bahrain-based AAOIFI. Moody’s noted that SBP has implemented 16 AAOIFI Sharia standards, with an additional six standards to be adopted.

Halal Industry
La Tahzan engages more customers through app chat

Young Indonesian entrepreneur launched health products business on potential for dates to boost fertility and pregnancy rates.

 

Jakarta: Health products brand La Tahzan has been among the multitude of commercial opportunities available during Ramadan with owner Mutiara Nisa offering her customers a variety of dates, honey, saffron and herbal initiatives to complement their attempts to fall pregnant.

Arabic for “don’t be sad”, La Tahzan has the goal to share happiness with customers, employees and the surrounding community. Nisa established the shop in 2018 as a side job on e-commerce site Lazada.

Starting by listening to the wishes of those around her who believed young dates were good for getting pregnant, Nisa offered young date products to friends running a pregnancy programme. Unexpectedly, many of them fell pregnant, prompting Mutia to expand her business and focus on health products to support pregnancy programmes and maintain immunity. 

“We want to share our happiness … including providing various products believed to be efficacious in helping with pregnancy programmes such as dates, zuriat fruit and other health products. Alhamdulillah, many people love the products we offer,” Nisa told Salaam Gateway.

From a home business, La Tahzan has expanded to the stage of recruiting resellers and is no longer Nisa’s side job. She has boosted her employee numbers and chosen to empower vocational high school (SMK) graduates by training them with good administrative and marketing skills.

 

Mutiara Nisa selecting an order (Courtesy: La Tahzan).

Nisa hopes to support people with the potential to achieve their dreams and aspirations, in terms of economy and skill improvement. La Tahzan currently employs 20 employees in Jakarta and owns a warehouse and cold storage to maintain its products efficacy and quality.

“The happiest thing is when the customer is successful with her pregnancy programme … In addition to wanting to continue to give hope to others so they won’t be sad, we also dream of being the number one provider of natural health support products in Indonesia,” Nisa said.

She added that success was not “just about profit”, but also about where the company could make people happy and their dreams come true.

“That’s why we are happy to hear customers are successful in their health and pregnancy programmes or see our employees and resellers are growing,” Nisa added.

 

La Tahzan's Chat Feature (Courtesy: La Tahzan).

 

Leveraging e-commerce Chat Feature

While maintaining e-commerce sales performance was not easy, Nisa’s persistence in studying various features and improving her marketing through the Lazada University has helped develop La Tahzan.

“To win the hearts of customers, there are several tips. First, keep the product quality. Second, provide quality customer service. The chat feature in Lazada helps me provide services while educating customers quickly and effectively. Third is social media marketing – take advantage of social media to attract customers’ attention and drive traffic to stores in e-commerce,” said Nisa.

She believes maintaining good communication with customers was key to business growth. Usually, potential customers ask plenty of questions about the efficacy of certain products before buying. Consequently, answering their questions quickly while providing education through the Lazada online chat platform was one way to provide satisfactory customer service. Sellers can optimise their customer relations via the customer engagement management (CEM) feature that simplifies the sellers’ communication channel.

“Chat is not only for answering questions, but also a channel for building relationships that has the potential to bring in more income when additional sales occur through up-selling and cross-selling,” Nisa said.

© SalaamGateway.com 2022. All Rights Reserved

Halal Industry
Halal hunted meat becomes a popular niche market

The rules may be a little vague, but the opportunities for halal game is growing as wealthier Muslims seek out new experiences.

 

Halal hunted game meat is becoming increasingly popular as a healthier and premium alternative product in wealthier countries with sizeable Muslim communities.

There are no international standards for halal game, but, according to The New Muslim Guide, written by Fahd ibn Saalim Baa Hammaam (also known as Fahd Salem Bahammam) in association with Islamic scholars, “Muslims are permitted to hunt lawful animals and birds (that) cannot be easily caught and slaughtered”, so long as they are eaten.

This means recreational hunting is forbidden, but prey caught by trained dogs or falcons is considered halal in the Qu’ran, say scholars. However, The New Muslim Guide takes a stricter line: “Hunting is permitted in Islam only when necessary for food. Taking the life of an animal for sport, without intending to eat from it or otherwise benefit from it, is prohibited”.

There are also restrictions in allowable weapons: “The hunting weapon must kill by reason of its sharpness, like an arrow or a bullet” and “the name of Allah must be pronounced when the hunting weapon is discharged”, according to the same source.

If an animal is wounded, say with a stone or a trap, it must be slaughtered later according to proper halal (permissible) procedures.

Despite such difficulties, there has been a “notable increase in the popularity” of hunted wild game meat in recent years in halal and non-halal markets said researchers from the University of Milan, Italy and Michigan State University, USA although a “lack of professional supply chain” has limited growth.

That may change, indicated Mustafa Farouk, a senior meat scientist at AgResearch Ltd, a New Zealand government-owned livestock-focused biological science and development institute, given halal game provides an alternative for Muslims in European countries where animals must be stunned before slaughter, such as in Denmark.

 

Read - European rules on butchering tighten, challenging halal sector

Read - Halal and non-halal experts work to treat animals humanely – but consciousness at killing remains a concern

 

Moreover, higher-end restaurants in Muslim-majority countries will also increase demand, he said: “A lot of high-end restaurants in the Middle East will be looking forward to having this kind of product.”

There is no global data about halal game and in many places game meat is hunted for subsistence without official records being taken. Yet, according to the United Nations (UN) Food and Agriculture Organisation, overall global game meat production reached 1,950,395 tonnes in 2020.

This represented a 25% growth since 2000 with largely non-Muslim Papua New Guinea being the largest producer, followed by the USA (3.45 million Muslims) and Nigeria with around 100 million Muslims. African countries represent 59.1% of the total production (there are around 500 million Muslims in the continent), followed by Oceania (22.4%), while Europe produces much less (0.7%).

Game hunting in New Zealand

Farouk, who co-wrote an academic paper about halal game, said potential halal game export markets were “mostly in Europe, Australia, New Zealand and part of Africa”. However, in the largest producing countries, people hunted only for themselves. He has “a few friends who are Muslims and hunters” who “share (it) with friends as a treat” in New Zealand.

Farouk believes “very few” Muslims hunt for themselves in Europe, and, based on his investigation, “the biggest importing countries are mostly rich European countries”.

South Africa has a wide “range of wild animals that can be hunted” and New Zealand has a well-established supply chain for hunted meat. Consequently, Farouk wants to encourage New Zealand game producers to follow halal principles to expand their businesses.

South Africa’s halal game

Mufti Mohamed Yusuf Seedat, general manager of the South African National Halaal Authority (SANHA) for the Gauteng region and theological representative, told Salaam Gateway his organisation works with a small number of halal game producers, but believes this sector has the potential of “huge growth in the future”.

“In South Africa, given its climate and land, game farming has become big in tourism. Therefore, the government controls which animals must be killed to keep the environment sustainable,” said Ebi Lockhat, SANHA public relations officer.

Seedat explained most hunts take place in the country’s central areas and many at night under “freezing cold” temperatures by “highly trained personnel”. In most hunts snipers are on the open-back of vehicles and occasionally animals are also shot “from a helicopter”.

Teams rush as quickly as possible to those animals and do the slaughter, ensuring they are still alive. SANHA sends supervisors with hunting teams to ensure compliance with Islamic dietary rules.

Certain procedures usually undertaken at abattoirs, such as removing the intestines, are staged in the field before the trucks are sealed and the meat sent to certified abattoirs for further processing under supervision. Thereafter, the meat is exported or dispatched for domestic manufacturing, packaging and sale.

Such requirements do not make halal game prohibitively expensive since the price relates to the market value of the source animal, said Seedat, noting certain animals, such as duiker (a small antelope) and springbok, can cost “$100 or less” to kill, transport and sell, including fees and certification costs.

However, some animals command more regulatory and processing costs, for instance sable antelope and large African buffalo, which can cost hunters Rand 100,000 ($6,691) before sale, he said, notably because they may be sourced from a restricted area that is expensive to access or the animals are rare.

“So, if you shoot the wrong one, you will pay a lot,” noted Seedat.

Demand for halal game 'steady not surging' in the UK

Muhammad Hussain Nasim, the founder of British onlinemeatshop.com, part of the 29-year-old group Noori Halal Butchers, said his company has been trying to promote halal deer in the UK. “In the last two years, we have seen a growth in just venison sales by over 100% and the sales of halal meat, namely deer and rabbit, represent at least 11-12% minimum of our sales”, he said, indicating this was “huge” in a universe of nine types of meat.

Onlinemeatshop.com has 60 private customers and four restaurants buying halal game monthly, he answered.

For more than two years, the entrepreneur has been working with hobbyist freelance Muslim hunters who hunt in paid “government authorised locations” in Petersfield, Hampshire; Dunsfold, Surrey; and Braintree, Essex in southern England, trusting they follow halal procedures.

They do not use bullets, rather arrows, traps or stunning mechanisms and, once an animal is wounded, it usually takes 20 minutes to find and slaughter it. This follow-up must be undertaken with care and speed, because a wounded deer can “go crazy” and “tear the human apart”, he explained.

Nasim argued the work helps reduce deer numbers to safe levels, preventing road accidents and balancing ecosystems without predators for these large animals.

He foresees a “steady rather than surging” halal game business since more people are becoming vegans or vegetarians in the belief this “is the way forward to help society”.

However, he argues game is a sustainable option: 100kg of cow yields 60kg of edible prime meat whereas 100kg of deer can deliver 80kg of top-quality edible meat.

© SalaamGateway.com 2022. All Rights Reserved

Halal Industry
Newswrap: Halal industry

Indonesia ends palm oil export ban, but other country export bans remain; African Development Bank to provide $1.5 billion facility to Africa; ICARDA to develop crops to resist drought and salinity; Hershey’s opens R&D centre in Malaysia; UK’s Co-op supermarkets to stock Zinda Foods.

 

Indonesia ends palm oil export ban, but other country export bans remain

Indonesia overturned its three week ban on palm oil exports on Monday, reported the EconoTimes. “Based on the current supply and price of cooking oil and considering that there are 17 million workers in the palm oil industry, both working farmers and other supporting staff, I have decided that the export of cooking oil will reopen,” the Associated Press quoted President Jokowi as saying on Friday. The initial ban, in late April, was to try to prevent domestic cooking oil prices from rising.

While the move by the world’s largest palm oil producer will help to ease pressure on the global edible oil market, other countries food export bans remain in place, reported Firstpost. Earlier this month India banned the export of wheat, while Argentina put export caps on corn and wheat, Egypt (as of 12 March) banned exports of vegetable oil and corn for three months, and Iran banned indefinitely the export of potatoes, tomatoes, onions and aubergines. Serbia meanwhile has limited exports of wheat, corn, flour and cooking oil, while Turkey has banned various grains, beef, mutton, goat meat and butter, both until the end of 2022.

African Development Bank to provide $1.5 billion facility to Africa

The African Development Bank (AfDB) approved $1.5 billion to support African countries amid the rise in food prices, with the continent facing a shortage of 30 million tonnes this year, particularly crops, reported Reuters. The African Emergency Food Production Facility aims to support small-scale farmers to fill in the gap in food supplies caused by the Ukrainian-Russian war, protectionist measures, surging fuel costs and inflation. The facility will provide 20 million farmers with seeds and access to fertilisers. The aim is to produce 38 million tonnes, to $12 billion in production over the next two years. Wheat prices have increased 45% in the continent since February, while fertiliser prices have increased by a staggering 300%. Reuters reported that the AfDB facility will generate production of 11 million tonnes of wheat; 18 million tonnes of maize; 6 million tonnes of rice; and 2.5 million tonnes of soybeans.

ICARDA to develop crops to resist drought and salinity

The International Centre for Agricultural Research in the Dry Areas (ICARDA) is setting up a new initiative to bolster livestock and plant production, reported SciDev.Net. In partnership with the UN’s Food and Agriculture Organization (FAO), which has developed a Rapid Response Plan to support smallholder farmers, ICARDA aims to improve agricultural production, including improving soil quality, fisheries and agricultural guidance systems.

"The initiative is based on developing plants that tolerate drought and salinity, such as wheat, barley and chickpeas, through cross-breeding and transfer of genetic traits between different plants to benefit from them," said Aladdin Hamwieh, breeder, biotechnologist and Egypt country manager for ICARDA.

The World Food Programme (WFP) said that in 81 countries “acute hunger is expected to rise by 47 million people if the conflict in Ukraine continues unabated, with the steepest rises in Sub-Saharan Africa”. "This on top of the 276 million who already face acute hunger worldwide, meaning that up to 323 million people could face acute hunger in 2022," said James Belgrave, a WFP spokesperson, to SciDev.Net.

US confectionery producer Hershey’s opens R&D centre in Malaysia

Hershey’s has opened a research and development centre in Johor, Malaysia to “develop, test, and launch new products customized to consumers’ tastes in the AEMEA region (Asia Pacific, Europe, Middle East, and Africa), reported PRNewswire/AsiaOne. The US-based Hershey’s employs 19,000 worldwide, and has over 100 brands with annual revenues of $8.9 billion. The 10,400 square-foot facility in Johor will house R&D laboratories, a packaging development facility, and a sensory area, which will enable the company to partner with various innovation teams to taste-test and shortlist products.

UK’s Co-op supermarkets to stock halal food-to-go supplier Zinda Foods

UK-based Zinda Foods has secured a listing with 77 Co-op supermarkets across the country, reported Hospitality and Catering News. The halal-certified producer is to launch three variants of its chilled food-to-go wraps, which are also available at Tesco and Budgens & Londis stores. In March, Zinda Foods secure a “six figure growth investment to fund rapid expansion plans. This funding is part of a pre-seed round led by HVB 88 Angels, a US-based Angel Fund along with a US-based private investor,” its website stated. A further seed round is planned in May through a Singapore-based private equity fund.

Halal Industry
Natural halal beauty products link sustainability and faith to deliver strong growth 

The global trend towards more natural and vegan ingredients is bringing multi-national brands closer to halal beauty brands.

 

Dubai, UAE and Selangor, Malaysia: The gap between halal and natural beauty is narrowing as halal beauty brands integrate natural and vegan ingredients into their products and global cosmetics companies use more inherently halal ingredients.

“In essence, the majority of halal ingredients are of non-meat origin, hence vegan products are, by default, usually halal,” Amna Abbas, consultant for beauty and fashion at market analysis company Euromonitor International, told Salaam Gateway.

Not every halal beauty product is vegan as some contain ingredients derived from permissible animals slaughtered according to Islamic law; are marine animals deemed halal or include beeswax and honey.

However, plant-derived ingredients are increasingly replacing animal-derived ones in the manufacture of halal cosmetics to remove doubt and gain acceptance among both Muslim and vegetarian consumers, according to research by Asian researchers published in the academic journal Cosmetics.

“Many times, halal products bearing the halal logo are (sold as featuring) cleanliness, quality, purity and safety,” Husain Indonesiawala, director and market research specialist at India-based Straits Research, told Salaam Gateway.

He said certified natural-halal beauty products often followed current good manufacturing practice (CGMP) certification standards that ensure cosmetics manufacturing process of high quality. They also followed hazard analysis and critical control points (HACCP) guidance to reduce hazards posed by biological and chemical elements that made cosmetics unsafe.

“Products used for halal beauty products are expected to be traceable and often incorporate a myriad of thickeners (such as carnauba wax), solvents (corn and avocado oil, sesame oil and polyethylene glycol), colourants, anti-ageing agents (phloretin) and skin whitening agents (vitamin B3) among others,” said Indonesiawala.

Since halal-certified beauty products cannot contain harmful substances under many halal certification systems (like those imposed by Malaysia’s National Pharmaceutical Regulatory Agency), they usually do not contain harsh ingredients such as sulfates and parabens.

Consequently, many halal cosmetics rely on natural ingredients, creating an overlap with products qualifying as halal without having the certification.

“Ethical and natural concepts are in line with halal principles as the term ‘halal’ includes products that are ethical … therefore, halal certification is primarily an ethical certification,” Mohamed Elkafrawy, CEO of Italy-based World Halal Authority (WHA), told Salaam Gateway.

He said around 45% of WHA-certified cosmetic companies have certified natural products.

 

Simbioze Amazônica's range of clay-based masks and essential oils are exported to the Middle East (Courtesy: Simbioze Amazônica).

 

Reaching a wider market

As Muslim consumers actively seek out more natural and ethically-sourced products that are also halal, companies are raising their game to match these demands. This is evident from the growing number of beauty brands offering both halal-certified and natural products.

These include US-brands Lyda Beauty, Alzo International and Amara Beauty, as well as L'Oréal (France), Unilever (UK/Dutch), Beiersdorf (Germany), Inglot (Poland), Inika Organic (Australia), SO.LEK and Breena Beauty (Malaysia), Iba Cosmetics (India), Wardah Cosmetics (Indonesia, and PHB Ethical Beauty (UK).

The Muslim spend on cosmetics increased 6.8% year-on-year in 2021 to $70 billion and is expected to reach $93 billion by 2025 translating into a 7.4% four-year compound annual growth rate (CAGR), according to DinarStandard’s State of the Global Islamic Economy Report 2022.

 

See - Infographic SGIE 2022: Halal cosmetics

 

The market for organic personal care and cosmetics products is also booming. Valued around $33.4 billion in 2020, it is expected to hit $58.6 billion by 2031, registering a 5.3% CAGR according to India-based research company Allied Market Research.

Joao Paulo Da Silva Elvas, head of international office at Brazilian cosmetics manufacturer Biozer da Amazônia, said halal certification was essential for brands looking to expand their market boundaries and reach the fast-growing global Muslim population.

His company secured halal certification from the Federation of Muslim Associations in Brazil (FAMBRAS Halal) for its Simbioze Amazônica range of clay-based masks and essential oils in 2019 to export its products to Middle East countries.

“Halal certification is important if you want to enter Arab markets. It legitimatises the process and materials used in the products that gives confidence to your potential clients and puts your product at a higher level,” he said.

 

Read - To acquire or not to acquire – the great cosmetics halal certification debate

Read - Exports of South Korean cosmetics to OIC countries surge 28%

Read - Indian halal cosmetics brand Iba taps online shopping boom

Read - Indonesia’s $4 bn halal cosmetics industry poised for growth

 

Additional guarantees

Alongside halal certification, brands are adding other labels to guarantee their ingredients are from natural origin. Simbioze Amazônica obtained the COSMOS Natural seal for three of its essential oils and Biozer da Amazônia is securing this certification for other products.

Having both halal and natural labels has made it easier for the brand to market its products in the Middle East, US, Canada, Australia and Chile and will facilitate its planned expansion to Europe, said Da Silva Elvas.

Similarly, Spec-Chem Industry, a Chinese manufacturer of natural cosmetics ingredients supplying the US and European markets, has invested in multiple certifications including COSMOS; a halal certificate from the Asia Pacific Halal Council and vegan certification from the American Vegetarian Association.

Malaysia offers sound examples of how halal natural beauty products can be developed and successfully sold, as the country has a highly developed halal certification system. Brands such as Malaysian Millefleur use vegan-friendly formulas for its skin care lines; are affordable and environmentally conscious. Using a mix of natural oils and extracts, the brand appeals to the mass market and the devout.

Another Malaysian beauty brand satisfying halal and environmentally-aware consumers is Nurish Organiq, a brand offering a home-grown range of skincare products developed by an experienced team. The range infuses wholly natural extracts and organic ingredients, eschewing artificial colourings and mineral oils.

In neighbouring Singapore, Handmade Heroes has grown as the go-to natural halal beauty brand in the city-state, expanding its reach to Malaysia and across south-east Asia. Its lip scrubs are made from sugar and a mix of natural oils. Handmade Heroes also boosts sustainability by using minimalistic packaging.

Founder and managing director of Malaysia-based beauty product manufacturer Indochine Natural Sdn Bhd Mike Thair stressed the transparency delivered by following certification systems – for halal and natural lines – boosts consumer confidence and sales.

“Transparency is a big part of our brand messaging,” he said.

Ahmad agreed, saying halal consumers were increasingly aware of the possible presence of critical substances in products beyond food, but also cosmetics and pharmaceuticals. This meant they paid greater attention and made a more scrupulous and careful selection of the goods they consumed.

“All this translates into market opportunities for those who certify themselves and limitations for those who do not. From this perspective, it can be said natural products have a great potential in halal cosmetics,” she said.

© SalaamGateway.com 2022. All Rights Reserved


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