Southeast Asia Halal Food Market Offers Compelling Investment Opportunities

By the EMIS Insights Editorial Team

The halal food market in Southeast Asia is experiencing robust and dynamic growth, driven by the region's large Muslim population, rising disposable incomes, and evolving consumer preferences. According to Vantage Market Research, the global halal food market was USD 2.19tn in 2022 and is estimated to reach USD 6.05tn by 2030, growing at a CAGR of 13.5% between 2023 and 2030. The ASEAN region, home to over 240mn Muslims, is a key driver of this expansion. The halal food sector in Southeast Asia is poised for sustained expansion, offering compelling investment opportunities.

Halal food is the second largest sector of Islamic economy, with Muslim consumers’ spending on food seen reaching up to USD 1.6tn by 2025, according to a March 2024 publication in NuFFooDS Spectrum.

The ASEAN region, home to over 240mn Muslims, is a key driver of the expansion of the halal food industry. Factors, in addition to the above, such as increased consumer awareness, government initiatives to promote the halal industry, and the diversification of halal product offerings beyond traditional categories have further fuelled the market's expansion. 

Malaysia has emerged as a global leader in the halal industry, with its halal certification and standards recognized worldwide. Malaysia’s halal exports reached MYR 54bn in 2023, trade minister Tengku Datuk Seri Zafrul Abdul Aziz said as cited by the Exchange Asia. The majority of these exports were destined for other Muslim-majority countries in the region. 

The main challenge for Malaysia's halal food exports is the limited capabilities of its small and medium-sized enterprises (SMEs), which make up 98% of the local halal food companies. These SMEs lack the resources and expertise to scale up their operations and penetrate international markets. To address this, the government, through agencies like MATRADE, is providing mentoring, financing, and market access support to help these companies grow their export capabilities. 

As the country with the world's largest Muslim population, Indonesia holds significant influence in the Southeast Asian halal market. The country's key export markets include other ASEAN nations, as well as the Middle East. 

Indonesia’s halal market stood at USD 279.26bn in 2023 and is seen reaching USD 807.86bn by 2031, growing at a CAGR of 14.2% in 2024 to 2031, Data Bridge Market Research figures show. The country's halal food and beverage industry accounts for 16% of the global market, and it ranks first in terms of highest consumer spending in this sector. The key growth areas for Indonesia's halal exports include food, media, and modest fashion. Additionally, Indonesia's halal pharmaceutical industry is responding to increased demand, with the government issuing mandatory certification requirements. Moving forward, Indonesia's halal industry is poised for continued expansion, driven by its large Muslim population, growing consumer demand, and government support for the development of the sector.

Thailand, a non-Muslim majority country, has also been actively developing its halal food industry. The country is the second-largest exporter of halal products in the Global Muslim Travel Index (GMTI) among halal food producers. From January to November 2023, Thailand exported halal food products worth BHT 217bn, up 2.6% y/y, statistics cited by the Thai government showed. There are more than 15,000 halal food producers in Thailand. 

Singapore has been proactive in building a robust halal ecosystem and leveraging its reputation as a Muslim-friendly destination. Singapore's halal food market is expected to grow by 8%-10% in the next few years. The country has a well-established halal certification system and over 5,000 halal-certified establishments. 

Vietnam is also taking proactive steps to position itself as a key player in the halal industry. The Vietnamese government has approved a project to strengthen international cooperation and develop Vietnam's halal industry until 2030. This project aims to open up the potential halal market and establish a National Halal Certification Center. The government is also working on developing national standards for halal products to ensure compliance with Islamic dietary laws. 

Governments across Southeast Asia have implemented various initiatives to promote the halal industry, including the establishment of regulatory frameworks, certification bodies, and incentives.  This supportive environment provides a favorable landscape for halal food exporters from the region to expand their global footprint. In conclusion, the halal food industry in Southeast Asia offers significant export prospects and opportunities, driven by the region's strategic location, large Muslim population, and growing global demand for halal-certified products.