As the land of the rising sun, Japan number of tourists infiltrating the society has been rising since the early 20th century. From its neighboring states like China to the far end of the West like Brazil, the cultural diversity of the Japanese society has been reshaped time and again. Faced with a fast-growing diasporic community in Japan from all parts of the world, the diversity of consumer products expands tremendously as well. One of this is the Halal Sector. This posed as an opportunity to the Japanese Fast Moving Consumer Goods (FMCG) industry as they can diversify their production to cater to the Muslim consumers.

In Japan, there is a rising number of Muslim in the recent years.

History of Halal in Japan

The Japanese Halal FMCG industry became prominent only after 1985 Housing Bubble Burst. The Housing Bubble Burst came as a result of speculative pricing and demand, which led to growing disenchantment with the intangible products industry. To overcome the economic crisis, Japanese producers realized that they to diversify their production, and one industry they turned to was the Halal industry.

Although the Japanese firms did begin to produce Halal products, it was mainly catered for exports. The concept of “Halal”, which means permissible by Islamic regulation for consumption, was never part of the Japanese culture. In Japan, the amount of Muslims in the country takes up less than 1% of the entire pie chart; there is less than 185,000 Muslims in Japan as of 2010. This figure is not much from the 118,000 in 1990, which suggests that the growth of the Japanese Muslim population is not occurring at a rapid rate.

As the Japanese Muslim community is minimal, the number of Halal products being imported to Japan would naturally correlate. In the 1990s, the Halal certification was mostly issued by the local Japanese Muslim community to help their fellow Muslims identify the restaurants which they perceived to be “Halal”. As there was no authorized or state-sponsored Halal certifying body in Japan, the Japanese Muslim or Muslim visitors have to rely on guidebooks or forums and the local Muslim community’s word of mouth to guide them to Halal restaurants, consumer goods and places of worship (Masjid).

Halal Today

Despite the fact that the Muslim community is small, there are at least 10 recognized Halal certifying bodies in Japan. These Halal certifying bodies aim to grant certification mostly to FMCG producers than local eateries as they aspire to target these FMCG producers who are interested to export their products to Muslim majority countries. Looking at the Halal certifying bodies, coupled with the data on the imports of Halal certified goods into Japan, it is certain that Malaysia is one of the most prominent players in the Japanese Halal market. In fact, one out of the 10 Halal certifying bodies came from Malaysia, which is known as “Malaysian Halal Corporation” or MHC. As the eponymous company name suggests, MHC is a Malaysian organization that strives to provide Halal certification to manufacturers. It was founded in 2010 to help Japanese producers to overhaul their production chain into a Halal one. As Halal does not only mean omission of pork and alcohol and “Halal” slaughtering, it also boils down to the attitude of the producers. As such, MHC endeavors to provide a “one-off” service to help Japanese companies to establish Halal certified businesses so that they could enter the Muslim market.

Today, the Japanese Halal industry is growing at a rapid rate with 3 major B2B and B2C websites catered to sell Halal ingredients. They are Al-Flah, Galleon, and Sonali Foodstore. In these three major Halal products E-commerce platforms, one of the leading suppliers came from Malaysia (refer to fig 2). In fact, Malaysia prides itself on having strong working relations with Japan. This is owing to the fact that Malaysia has been the key partner and advisor to the Japanese, with regards to Islam and the halal market. Malaysia exports a wide variety of Halal items into Japan such as Oil & Fats, Spices, and even fresh fish.

A Barchart reflecting the percentage of Halal imports by country.

Why are the Japanese turning to the Halal sector?

At this point, one might ask: how did Halal consumerism become a salient trend in the recent years in Japan? And more importantly, why are the Japanese turning to the Halal sector?

The rising interest for Halal products do not come from the Japanese Muslim or the foreign visitors; it derived from a position that Halal equates to healthy. In fact, the non-Muslim Japanese has a unique interpretation of Halal: they defined Halal products as healthy and pure which makes it safe for consumption. This stemmed from the idea that because Halal products adhere to the long historical traditions of Islamic teachings, it strived to preserve the purity of Islamic teaching. The Halal teaching thus prescribes strict prohibitions. This leads the Japanese to believe that by consuming Halal, they would be able to lead a healthy way of life.

Apart from staying healthy, the Japanese producers want to tap on to the growing market of Halal consumers abroad. Japan is an aging population: we all know that. Consequently, FMCG cannot just target the domestic consumers as the number of consumers are decreasing. It is essential for them to tap into other markets as well. As such, Japanese FMCG companies are increasingly interested to target Muslim consumers, especially from Southeast Asia and the Middle East. Given that they already have a strong playfield in marketing and advertising, the Japanese can tap on to their specialization in these fields to appeal to the Muslim consumers. Besides, it is recognized that the Japanese are some of the best producers of FMCG in the world, thus exports from Japan naturally gain a stronger grasp in the mind of the consumers from abroad, especially from the Muslim consumers.

 

Growing trend of Muslim visitors into Japan (Source: Tokyo Times)

In line with its goal to reach out to a wider pool of audience, Japan aims to make itself a global education hub. As the Japanese government aims to widen its diversity of students from all parts of the world, it has started to create education curriculum targeted to a diverse pool of audience. Naturally, the Japanese government understands that part of this audience would be Muslims. As such, the Japanese FMCG industry aims to make use of this opportunity to develop Halal products suitable for the Muslim students. Besides targeting the students, the FMCG industry will also be able to target the influx of Muslim diasporic community into the country. In most of the nuclear families in Japan, it is necessary for both parents to work. As such, many of them are beginning to rely on domestic workers from abroad and some of the pertinent maid-sending states are Indonesia and The Philippines. Indonesia, being the country with the largest number of Muslim are being sent to Japan to meet the growing demand for domestic workers. These Indonesians contribute to the growing demand for Halal products as well.

In the coming years, as Japan strives to open its door to the world for the 2020 Olympics, it is necessary that it starts to target consumers from all kinds of consumption needs. Further, the Japanese desire to be the next global education hub necessitates the shift from purely producing for the general public to the Muslim consumers. As such. with the rising influx of Muslim consumers and visitors into Japan, it is little wonder why the Japanese FMCG industry is heading to the halal direction.

Thanks for reading The Low Down by Momentum Works. This article is contributed by our partner Halal Node, which aims to establish a holistic B2B/G halal ecosystem driven by technology, transparency, trade and sustainability. 

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.