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Shopping hub to promote RI’s global halal market
Indonesia is embarking on another big campaign to further push the halal industry in the country by developing a halal shopping district in the heart of Jakarta
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span>Indonesia is embarking on another big campaign to further push the halal industry in the country by developing a halal shopping district in the heart of Jakarta.
The new shopping district, called the Halal Park Zone, is intended to be a trade center where producers of halal products and services, such as fashion products, cosmetics, food and beverages, from across the country can sell them.
“This is not a new plan as we have talked about it several times in the past,” President Joko “Jokowi” Widodo said when he recently launched the construction of the facility. “The district would accommodate small and medium enterprises that have been selected and here they would be able not only to sell but also to promote their products to overseas buyers.”
The district is to be built on a 21,000-square-meter lot in Senayan for a cost of about Rp 250 billion (US$17.75 million). The construction is being undertaken by state-owned company Wijaya Karya (WIKA) and is scheduled to finish within two years.
According to the design concept made available to media, the center is to be built like any shopping mall, with retail stores, boutiques, restaurants and cafes, as well as exhibition halls, offices, co-working spaces, a food court and even a museum about the history of Islam in Indonesia.
All products and services to be sold in the shopping mall are to be halal or otherwise permissible according to Islamic law.
Jokowi said the development of the halal shopping mall should become an embryo to further promote Indonesia’s position in the global halal industry, which has rapidly grown in recent years.
The 2018-2019 State of the Global Islamic Economy Report estimates the annual global spending across all business sectors by Muslims would total $3.07 trillion by 2023, rising from $2.17 trillion in 2017. From the total global spending, the most money would go to purchase halal food and beverages: an estimated $1.86 trillion by 2023, increasing from $1.3 trillion in 2017.
Meanwhile, the spending for halal fashion and travel is expected to surge to $361 billion and $274 billion, respectively, rising from $270 billion and $177 billion in 2017. The spending for recreation and halal pharmaceutics are projected to reach $ 200 billion and $131 billion as compared to $209 billion and $87 billion in 2017, respectively.
Indonesia alone still has ample room to further increase its share of global halal exports. At present, the country remains primarily a consumer.
The Dinar Standard Report shows that Indonesia’s share of halal exports sent to Organization of Islamic Cooperation (OIC) countries only totaled $7.6 billion in 2017, 3.07 percent of the total of $249 billion by OIC countries.
Indonesia ranked the 10th largest exporter to the OIC, lagging behind Brazil, the United States and India. Brazil is the top exporter of halal products to OIC countries with a total value of $18 billion.
The development of a halal district in Indonesia got a positive reaction from local businesspeople. The head of the Indonesia Halal Lifestyle Center, Sapta Nirwandar, said the halal district would stimulate all sectors in the halal industry to grow more.
“It can also push domestic consumption of halal products, as well as push exports of halal products,” he said recently.
Meanwhile, CEO and founder of the HIJUP Muslim fashion brand, Diajeng Lestari, who is also one of the initiators of the halal district idea, said it would become a platform where business players can broaden their market reach. The district would become a platform where a halal ecosystem, one that includes finance and education, would be able to grow.
“If we see in many cities worldwide that are popular for fashion, such as Milan [Italy], we can see there is a centralization of shopping activities. When tourists come, they shop there since tourism is deeply related to shopping and this concept is what we actually want to replicate here, but with the addition of halal values,” she said.
The development the Halal Lifestyle District, which is within the Halal Park Zone, is to be followed by the development of other similar districts. Diajeng revealed that another such district to be developed in West Java.
“But unlike the one in Jakarta that is more for trade, the one in West Java is aimed at the upstream industry,” she said.
