building the foundation of a global halal business

Entrepreneur. International Speaker. Author of Business BestSeller

“Marketing Halal: Creating New Economy. New Wealth”

31-Oct-17 Back To Basics: The Foundation of building a Great Halal Business 2

A property of AYS. All rights reserved

http://www.ays.com.my/

RJ. Liow receiving award from Former Prime Minister of Malaysia, Tun Dato' Sri Haji Abdullah bin Haji Ahmad Badawi.


http://www.marketinghalal.com.my/


• Founder & CEO of AYS. Co-Founder & CEO of CapFiX • Master of Science in International Marketing. Specialized in Strategy, Branding &

International Market Entry • Award-winning Entrepreneur eg “Industry Excellence Awards 2010” and "Asia’s Thought

Leader Award: Manufacturing 2012” • Author of Business BestSeller “Marketing Halal: Creating New Economy. New Wealth” • Speaking to thousands in Malaysia, UAE, Japan, Korea, India, Indonesia, Thailand and

Singapore • Consultancy in Starting up, Managing, Marketing and Global Entry in Halal Industry • Co-founded CapFiX, an online marketplace connecting worldwide advertisers to local

WiFi Hotspot Hosts in a country of their choice, to execute location base advertising, and enables WiFi Hosts to monetize their investment.

Contributor’s profile:

RJ. Liow



Content contribution Course title: Back To Basic: The Foundation of Building A Great Global Halal Business Course description: Focuses on the “how” to build a solid foundation of a company, before growing it into a sustainable Global Halal Business What will a user learn from the course: 4 steps to build a solid foundation of a Global Halal Business:

1. The Fundamentals 2. Critical success factors:

• Intellectual properties • Marketing mix • Operating system • Communication • Cash flow management

3. Managing Downsides 4. Going Global




There is a single biggest market in the world that has been largely overlooked by many.

The Global Halal Market

A New Economy. A Blue Ocean Strategy



Most people think it only refers to prohibited meats, but halal is a lot more holistic than that

Halal is a lifestyle, a quality assurance system

Beyond religion



Halal Toyyibban (what is permissible & wholesome) as a concept could be appealing

to both Muslims and nonMuslims



Size of Global Halal New Economy

US$2,300,000,000,000

The Halal New Economy: • 62% of the Global Halal Economy involve food

• Halal food is 17% of Global Food Industry

• Halal Trade: < 10% of Global Trade


Halal Key Drivers of Growth

USD 2.3 trillion

Sizeable and growing Muslim

population

Growing economic

development in Muslim countries

Emergence of potential Halal

markets (China & India)

Muslim population worldwide (2010) = 1.8 billion

Forecasted to grow at twice the rate by 2030 representing

27% of global population

“Between 1990 and 2010, GDP per capita for Muslims

worldwide has grown at a Cumulative Annual Growth Rate (CAGR) of 6.8% (Global

CAGR: 5.0%).”

“Chinese Halal markets is worth USD2.1 billion and growing at 10.0% annually.”

Source: Islamic Association of China Source: United Nation and IMF Source: Pew Research Centre 10


Diverse Sectors In The Halal Industry

Halal Product and

Services

Food

Ingredient &

Additives

Cosmetics

Animal Feed

Drugs and vaccines

Islamic finance

Pharmaceuticals

Logistics Halal is a

VALUE PROPOSITION

that exist within key

elements of the supply

chain of the intersecting

industry sectors

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Global Market for Halal Products

FMCG sector

Global market for Halal-potential products, 2005**

• The Halal market has

been quantified as the

target market that can

potentially be captured

• Approximately 67% of

these Halal-potential

products are

categorized as fast

moving consumer

goods (FMCG)

• FMCGs in the primary

meat and food sectors

account for 62% of the

market

Does not include Islamic Financial Services. Services involved in final product e.g. certification, logistics, R&D are

included in sectorial values

** Based on sales revenue

*** Halal processed food is taken as 66% of the total based on world Halal meat consumption

**** Only non-alcoholic beverages

Source: Euromonitor reports; FAOSTAT

100% = USD 2.3Trillion

Cosmetic

&

Personal Care

31-Oct-17 12


Target Markets for Halal Producers WHERE IS MUSLIM PURCHASING POWER? WHERE ARE MUSLIM CONSUMERS?

Source : Addressing the Muslim Market, A.T Kearney

Largest Muslim Population

Highest Purchasing Power Of Muslim

Population

Indonesia Saudi Arabia

Pakistan Turkey

India Iran

Bangladesh Malaysia

Turkey Qatar

Egypt Russia

Iran France

Nigeria Libya

China UAE

Ethiopia United States

Algeria Algeria

Morocco Singapore

Sudan Indonesia

Afghanistan Egypt

Iraq The Netherlands

Average growth of Muslim Population:

1.8% p.a

1.1 1.3 1.6

1.9 2.2

4.0

4.8 5.0

5.8 5.8

-

1

2

3

4

5

6

7

8

9

1990 2000 2010 2020 2030

Bil

lio

ns

Muslims Non-Muslims

World population (1990 – 2030): Muslim

versus Non-Muslim

Muslim population worldwide (2010)

1.8 billion

Source: Phew Research Centre 13



The foundation of building a great Global Halal Business


Back To Basics: The Foundation of building a Great Halal Business 15

4 steps to building the foundation of a Great Halal Business

Going Global

Expand market coverage

Managing Downsides

Gross margin. Reduction in cost of goods. Overheads

Critical Success Factors

Intellectual properties. Marketing mix. Operating systems. Communication. Cash

flow.

The Fundamentals

Vision. Leadership. Winning team

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The Fundamentals:

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Fundamentals:

• Passion and dreams are not sufficient • Need sound execution, and the ability to make

things happen • Need:

• Clear vision for the company • Strong leadership - different styles in various

phases of a company growth • A winning team - commitment, initiative,

attitude

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Intellectual Property

Marketing Mix

Operating systems Communication

Cash Flow Management

Critical Success Factors Factors contributing to building a sustainable business

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Critical Success Factors:

This cluster is critical to building the sustainability of a great Halal Business, for a company to market

Halal products and to create wealth for the company in the long term

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Critical Success Factor: Intellectual Property

Expensive to trademark a company’s brands but necessary

Check out www.myipo.gov.my

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Critical Success Factors: Marketing Mix • The most basic 4Ps must be in placed -

Product, Price, Promotions, Place

• Must address the following questions:

• What pains to solve • What needs to fulfill

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A very crowded space to fight for a consumer


Brand building is critical to stand up from competition


Above the Line activities: Celebrity/Expert endorsement 31-Oct-17 24

Above the Line activities: Consumer Campaign to build brand awareness and drive sales

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Below the Line activities: Promotions to push sales!


Below The Line activities: Promoter Strategy to push sales



Critical Success Factor: Operating System

• Must establish standard operating procedures

• Reduce the reliance on selected staffs. The operations must be able to operate without interruption

• Compliance is key

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Critical Success Factor: Communication

• Share with the team the future of the company and where the company will be in mid to long term

• Vision must be clear and vivid to create positive energy for the team – team members must be able to see what the company leader sees!

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Critical Success Factors: Cash Flow

• The most important factor of all

• The disaster is no money to keep all the company’s excellent work going!

• Ensure to have Monthly Financial Reports prepared . Review carefully and plan the cash flow to ensure sufficient liquidity

• Chase for sales and cut costs to stay afloat

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Managing Downsides

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Managing Downsides • Recipe for disaster if we were to loose sight of:

• Gross margin – to pay off all direct costs • Constantly find ways to reduce cost of goods • Control and cut unnecersary Overheads

• Know when to exit if things do not go according

to plan

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Managing Downsides

• Useful to involve your team

• Take ownership in cost cutting exercise

• Run profit enhancement projects

• Record and review

• Monitor progress and identify next actions

• Reward successes

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Going Global

• 2 purposes:

• Expand market coverage • Achieve economy of scale

• Generate s Incremental Profits

• But more complex

• Important to evaluate the Halal

standards in those markets.

• A Halal certificate from JAKIM should be able to allow international access


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Market Selection Consideration 5 most commonly considered factors in practice:

• Product nature

• Importation regulations

• Past experience

• Available export led network

• Distance to home market

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International Market Entry Strategies 5 most commonly used strategies:

• Export

• Contract Manufacturing

• Foreign Direct Investment

• Joint venture

• Acquisition

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Last words



You want to be successful in running a Halal business? Do these…

• Committed to the principal and values of Halal

• Have a dedicated Halal plant

• Establish chain of trust

• Halal certified by recognized organizations



Must establish a Credibility Triangle to remove doubts in the minds of consumers:

The company

Product with Halal logo

Reputation of the Halal certification body



Absolutely NO NO, please!

• Don’t limit to Muslims only

• Not serious about halal certificates

• Don’t lie to customers

• Don’t ever think that consumers cannot

find out what you do!


Quiz: Which are the 4 steps to building the foundation for a great Global Halal Business?

A) The Fundamentals, Critical Success Factors, Managing Downsides, Going Global

B) Intellectual Properties, Marketing Mix, Operating System, Communication




Google “RJ Liow” and “Ren Jan Liow”

Email: [email protected]
