Vietnam’s Halal Industry: Opportunities, Challenges, and Future Prospects

Mr. Akram Waqas, a devout Muslim from Pakistan, has embraced Vietnam as his second home. For the past five years, he has navigated the vibrant streets of Hanoi, balancing his business ventures with family life. As the Founder and Business Development Director at Emiviet Co., Mr. Waqas married a Vietnamese woman who shares his Islamic faith, contributing to the growth and awareness of Vietnam’s Halal products. This integration highlights both the personal and professional challenges and opportunities within Vietnam’s burgeoning Halal market.

Together, they raise their three-year-old daughter, adhering strictly to Halal principles. Despite his deep appreciation for Vietnam and its rich culture, Mr. Waqas often finds a significant gap between his Halal lifestyle and the local community’s understanding of it. This disparity highlights the broader challenges and opportunities for Vietnam’s Halal products in the global market.

“Having the correct understanding of Halal is essential before setting foot in a Halal market,” Mr. Waqas stated at a recent international seminar on the economic opportunities for Vietnam from Halal products. “It’s all about staying healthy, clean, and living a healthy lifestyle. However, it can be very difficult in countries like Vietnam.”

His anecdotes illustrate the challenges he faces daily. “My three-year-old daughter, whenever she goes to a shop, is fascinated by the many colorful and delicious things on the shelves,” he continued. “She wants me to buy everything and eat a lot of the food at parties. People find it hard to understand why I stop her from many of those things. It’s about the Halal lifestyle that we follow. Again, it’s difficult, but we need to raise people’s awareness about Halal.”

Understanding Vietnam’s Halal Products

The term “Halal,” an Arabic word meaning “permissible,” signifies products and services that adhere to Islamic laws. At its core, Halal encompasses a wide array of ethical and hygienic standards that extend beyond mere religious compliance. This includes dietary rules—where meat must be slaughtered according to Islamic rites and be free from prohibited substances like alcohol and pork—alongside broader lifestyle practices encompassing pharmaceuticals, cosmetics, and financial transactions. Essentially, Halal represents a holistic approach to health, cleanliness, and ethical consumption, resonating with growing global trends toward sustainability and wellness.

Market Dynamics and Opportunities

The global Halal market is anticipated to soar to at least $5 trillion by 2030, potentially even doubling that figure according to some experts. This vast economic frontier is fueled by profound demographic and economic shifts. The Muslim population worldwide is set to expand from 1.9 billion now to 2.2 billion by 2030, representing roughly 30% of the global populace, as projected by Pew Research. This burgeoning demographic, coupled with rising incomes, is generating unprecedented demand for Halal products and services. Contrary to the common misconception that Halal is confined to dietary laws, the market spans a diverse array of sectors, including pharmaceuticals, cosmetics, tourism, finance, and fashion.

Muslim consumer spending on Halal products has consistently grown by an average of 7% annually over the past three years, according to data from Statista. This sustained growth underscores the vast potential for economies willing to engage in meeting Halal standards.

Vietnam’s Foray into the Halal Economy

Dr. Phan Chi Hieu, President of the Vietnam Academy of Social Sciences (VASS), expressed the urgency and immense promise of Vietnam’s foray into the Halal economy, emphasizing that “Vietnam is at the dawn of a significant venture into the Halal economy.” Associate Professor Nguyen Xuan Trung, Director of the newly established Institute for South Asian, West Asian, and African Studies (ISAWAAS), which falls under VASS, reinforced this view, noting that Vietnam is well-positioned to tap into the burgeoning market.

Vietnam’s robust agricultural sector, with exports in agriculture, forestry, and fisheries exceeding $53 billion in 2023, reflects its capability to meet the stringent demands of Halal certification. Vietnamese rice exports, for example, surged to over 8 million tons valued at $4.7 billion in 2023, securing Vietnam’s status as one of the top 3 rice exporters globally. Similarly, coffee exports, which generated $4.2 billion in revenue last year, align seamlessly with Halal criteria, demonstrating Vietnam’s readiness to cater to the discerning preferences of Halal consumers worldwide.

Navigating Challenges and Exploring New Horizons

Former Vietnamese Ambassador to the UAE, H.E. Nguyen Quang Khai, pointed out that Vietnam has been exporting goods worth billions of dollars to the Middle East and Muslim markets for years. However, the true potential of this trillion-dollar market remains largely untapped. One of the foremost challenges is navigating the intricacies of Halal certification and standardization.

Halal encompasses everything from “farm to fork,” requiring adherence to stringent guidelines that are particularly demanding in non-Muslim countries. Mr. Waqas emphasized the difficulty of understanding the broad concept of Halal outside a Muslim context. A true understanding of the Halal criteria that must be met to be certified and compete in the enormously promising Halal market is even tougher, according to Mr. Ramlan bin Osman, founder and CEO of the Vietnam Halal Center.

In April, Vietnam made a significant move by establishing the National Halal Certification Authority (HALCERT), the first government agency of its kind, aligning with international standards. However, harmonizing Vietnamese certification procedures with global norms remains a work in progress. The Malaysian model, led by JAKIM, with its globally recognized certification process, serves as a benchmark. Vietnam must aspire to this level of rigor to facilitate seamless access to international markets.

Bridging Knowledge Gaps and Boosting Awareness

A significant obstacle to Vietnam’s Halal market expansion is the widespread lack of awareness among local businesses about Halal requirements and market dynamics. Many producers, especially small and medium-sized enterprises (SMEs), are unfamiliar with the detailed aspects of Halal compliance, from sourcing ingredients to processing and packaging. This knowledge gap hinders their ability to meet the stringent standards necessary for certification.

To bridge this gap, both the government and industry associations are increasingly acknowledging the need for robust education and training programs. The development strategy for Vietnam’s tourism to 2030 has identified the need to focus on developing new and potential markets, including the Middle East and India. It states that Muslim tourism and Halal tourism present opportunities for sustainable tourism development, offering significant opportunities as well as challenges for Vietnam’s tourism industry.

Collaborative Efforts for Success

The Vietnamese Government’s commitment to developing the Halal sector is evident in its national project aimed at establishing a comprehensive Halal certification and support system by 2030. This project underscores Vietnam’s strategic focus on standardization, international collaboration, and providing financial incentives to businesses.

The success of Vietnam’s Halal market expansion hinges on the collaborative efforts of government agencies, industry associations, and businesses. By prioritizing education, streamlining certification processes, and actively promoting Vietnamese Halal products on the global stage, Vietnam can navigate these challenges and tap into the immense potential of the global Halal economy. This strategic approach not only positions Vietnam as a key player in the Halal industry but also ensures sustainable growth and international recognition for its Halal products.

This journey, while complex, promises transformative rewards for Vietnam’s economic landscape and its integration into the worldwide Halal community. The potential within the Halal economy is a “sleeping market” that Vietnam must awaken to.