What is preventing halal entrepreneurs from growing their businesses in local and international markets? The reasons for their lackluster performance may be many. However, the most important among the plethora of others, are fear and ignorance about what the opportunities are available out there in the industry.
Muslim-focused or halal businesses start their businesses. They see huge potential in the market. Most of them know there is a huge potential in the global halal industry. They participate in various trade shows or export-related conferences/seminars. However, they are not proactive in finding and meeting halal business partners from other markets. They do not even follow up with the people whom they had met in these trade shows.
Challenges being faced by halal businesses
Lack of Sufficient Funds
In principle, small halal businesses face two types of challenges as halal entrepreneurs. A major external problem these small halal businesses face is the lack of sufficient funds to grow their businesses. Islamic banking industry seems to have a lot of money. However, it is not reaching out to the halal entrepreneurs which actually needs it to grow their businesses. Despite the free-flowing cash in the Islamic finance industry, there seems to be a disconnect between the lenders and halal .entrepreneurs at every level.
Most of the halal businesses do not have the technical know-how to improve their product offerings to make them acceptable to the international audience.
The global Muslim market for halal products and services is huge but dispersed. The target Muslim population is 1.9 billion strong Muslims globally and is growing rapidly. However, like any other global religion, these Muslims have different cultural backgrounds. Islam and its local and geographical cultures are intertwined in their lives. Reaching this hugely diverse Muslim audience just by marketing and advertising may be a limiting factor as well.
It may even mean that we can not reach out to the global Muslim audience just by appealing to them in one way or the other. We will have to make some extra efforts to reach out to this target audience.
Muslims are one of the biggest and most diverse consumer bases in the world. The halal market is no more a niche market. It is a mainstream market that should not be ignored by venture capitalists as well as Islamic Financial institutes alike. The Muslim community has a clear market value.