But just as compelling is consumer spending in halal food, travel and fashion - expected to grow from $1.8 trillion in 2014 to $2.6 trillion by 2020, according to the GIER 2015/2016.
Combined, these markets could also be the solution to what the International Monetary Fund describes as 'secular stagnation' due to a decline in investments and an ageing population.
"The Islamic economy stands in stark contrast offering the most viable solution to global economic growth and success in the 21st century," the GIER 2015/2016 notes.
A more modest fashion sense
Muslims are estimated to have spent $244bn on apparel globally last year, according to a report published by Dubai's Salaam Gateway. But retailers and fashion houses have so far catered to the sector's specific demands at a slow pace.
Recent moves saw Swedish multinational H&M feature its first model wearing a hijab in a United Kingdom campaign in September and the launch of a line of luxury hijabs, and abayas, in January by fashion chain Dolce & Gabbana. Others including Donna Karan, Tommy Hilfiger, Zara and Mango have also come up with their own collections in recent years.
Despite this, Islamic Fashion and Design Council chairwoman Alia Khan suggests retailers and brands still have some work to do to understand their target consumer.
"It's not that the industry is not conscious of this very valuable customer that they'd all like to tap into and increase their revenue streams with, there is no doubt and no one faults them for this. I think it's a good thing. But what they have proven is they've failed to understand this consumer," she says.
"You're looking at individuals who are very independent in their dressing style. They don't necessarily care about lingo, about what's in or what's out or what's this season or last season."
The blossoming young Muslim population is driving the stylish hijabi or modest fashion look as their businesses or careers progress and their spending power increases, she says. However, many companies have been slow to cater to this segment with their products.
"What's happened is the products have received a lot of mixed reviews. That's because there were many pieces or styles that didn't really speak to this audience."
There are also a number of very valuable sub markets in Islamic clothing that have yet to be given enough attention. Khan lists examples of country or regional specific pieces like kimono abayas, more progressive Western style abayas and creative trench coat abayas as signs that the industry is taking steps to identify and cater to its diverse customer base.
DinarStandard senior associate for Indonesia Afia Fitriati also points to other areas yet to be explored like modest sportswear and ethical eco-friendly fashion.
"It's important for Muslim entrepreneurs in this field to think bigger; innovation is crucial to survive in the highly competitive fashion industry," she says.
Yet, should they succeed, retailers
may find a market that is larger than initially expected.
As with other sectors, Islamic fashion is not just appealing to Muslim consumers alone. Khan notes that online Islamic fashion boutiques are seeing more business from Christian and Jewish women looking for modest clothing.
"Beyond being faith based, this is about someone wanting to live within modest parametres. She wants to be equally sleek and stylish as her mainstream fashion counterparts but not compromising on the value that she chooses to live by."
For those that can correctly identify and cater to this broad market, the rewards could be vast. According to the Global Islamic Economy Report, the halal fashion market could be worth $327bn by 2020.
"If you're a designer you have to understand that the hijabi woman has made that commitment to the modest lifestyle for higher reasons; she's in it for life. So if you win her over you've got a customer for life," says Khan.
"The challenges are really up to the industry players and if they do their due diligence, they are going to be able to do extremely well."
Food for thought
Halal food is one of the largest global sectors of the halal economy and the segment can only get larger as the Muslim population increases. The Global Islamic Economy Report estimates the market was worth $1.128 trillion in 2014, or 16.7 per cent of global demand, and will touch $1.585 trillion by 2019.
Naturally it is the largest Muslim markets - Indonesia, Turkey and Pakistan leading this growth with respective expenditure of $157.6bn, $109.7bn and $100.5bn estimated in each country for 2014.
But there is also creeping interest from the non-Muslim consumer.
"Non-Muslims are also beginning to become important consumer segments in the halal economy - for instance, purchasing halal food for it's perceived high quality," notes Latif.
Recent moves have seen countries like Malaysia and the United Arab Emirates positioning themselves as halal food and certification hubs with the latter introducing a 'halal mark' for food imports and developing a standard for halal logistics.
Industry players too have realised the market's potential. Nestle Malaysia and its Halal Centre of Excellence is one of the biggest producers of halal products in the world, according to the Global Islamic Economy Report.
But there are still many challenges holding back the market including scare stories in the media.
Last year, supermarket chain Aldi apologised after selling black pudding containing pork blood, pork skins and pork stock with a UK health code stamp saying it was halal. Another case in October 2013 saw Chinese police discover that 22 tonnes of pork had been sold as halal certified beef, in the city of Xi'an in Shaanxi Province.
"Consumers are affected primarily in non-Muslim majority markets where they have to rely on halal logos and certifications," says DinarStandard chief executive and managing director Rafi-uddin Shikoh.
"Whereas in Muslim majority countries most governments take responsibility of all imports being halal, hence consumers are less concerned."
But with this being said, recent media exposure of products being incorrectly labelled in the Gulf Cooperation Council has raised awareness and concern.
In April 2014, the Abu Dhabi Food Control Authority was forced to respond to claims on social media that mayonnaise and other products sold by fast food giant McDonald's contained pork, according
The authority found no sign of pork in any products and McDonald's Arabia has taken to publishing all of its halal certificates online, as well as details of its procurement processes to ease concerns.
"McDonald's in the GCC dedicates enormous effort and research to ensure the needs of its local clientele are met, and that all food and procedures are unquestionably halal," says the company's Middle East
and Africa quality systems director Dr Habib M'Nasria.
This includes making sure suppliers adhere to social responsibility policies on aspects concerning animal welfare, food safety measures compliance, animal feed and above all halal, he says.
However, having imported 5,281 tonnes of halal beef and 16,881 tonnes of halal chicken to its restaurants in the GCC last year, an increase of 3.11 per cent, the company is not shy of the market's potential.
"The industry is a very lucrative market, especially in the GCC where the Arab region has a projected population growth of more than a third in the next 20 years," says M'Nasria.
Shikoh notes that a push for stricter and better quality halal compliance from GCC and Organisation of Islamic Cooperation countries through The Standards and Metrology Institute for Islamic Countries should ease any concerns of 'halalness'.
But another challenge the industry faces is growing suspicion of Muslim and Islamic customs in Europe and the United States including a recent ban on halal and kosher slaughter in Denmark.
"Engaging and overcoming these challenges will be pivotal to the future success of the halal food sector," notes
Fly me to the moon
Among the most lucrative new markets for the travel industry in recent years has been halal tourism
According to the Global Muslim Travel Index 2016 study by CrescentRating and Mastercard, Muslim travellers represented 10 per cent of the entire travel economy, or 117 million people, in 2015.
As an indication of the market's size, UK-based online booking platform Halalbooking.com said in October it was planning to launch a $1bn initial public offering within the coming years.
Another site, Singapore-based Halal Trip, also launched Muslim tour packages to 65 destinations earlier this year. While others such as UK-based Serendipity Travel and UAE-based Holiday Bosnia and Adriaday are offering safari and honeymoon, immersive and philanthropic and Quran-inspired trips respectively, according to DinarStandard senior associate for halal lifestyle markets Reem El Shafaki.
However, she says few companies offer differentiated services and focus mainly on offering halal food options and prayer times within their itineraries.
"While there are now many more companies targeting Muslim tourists, there is still a huge gap."
At the same time, countries too are waking up to the opportunities presented by the Muslim traveller.
CrescentRating and Halal Trip CEO Fazal Bahardeen points to his work at a recent country road show where two groups were being targeted - Chinese and Muslim tourists - as a sign of the market's growing prominence
Yet there are still very few destinations that cater specifically to Muslims alone.
A Muslim-friendly beach resorts report produced by DinarStandard and Thomson Reuters for Dubai's Salaam Gateway noted Turkey's emergence as a destination for Muslim travellers. It boasts more than 28 resorts dedicated to Muslims with many boasting dedicated pools and beaches for women, according to the report
"However, outside of Turkey there are very few resorts dedicated to Muslims although the demand exists," notes
Bahardeen says demand is being driven by more than just the growing population. The growing Muslim middle class means travellers are now "younger, better educated and have a higher disposable income," he says.
These travellers look for an number of things when choosing a destination including ease of access to prayer spaces, privacy, safety and family friendliness - given that an estimated 50 per cent travel with their loved ones. But first and foremost are halal-friendly dining options.
"The number one requirement is halal food, travellers don't want to have to walk for hours just to find somewhere to eat," he says.
Based on its criteria weighted for suitability as a holiday destination (40 per cent), Muslim friendly services and facilities (40 per cent) and halal awareness and outreach to Muslims (20 per cent), Malaysia topped the 2016 Global Muslim Travel Index followed by the UAE and Turkey.
But there are signs the market is not being taken seriously by other countries. El Shefaki notes that some Muslim nations are still not actively pursuing the halal segment despite having the necessary infrastructure in place.
"Egypt for example is still fixated on Western tourists as evident by the Egyptian Tourism Ministry's efforts to reassure Europe that it is a safe destination despite the recent Russian aeroplane tragedy, while not making efforts to target the Muslim travel segment," she says.
Given that the market is expected to grow to at least 168 million visitors by 2020 with forecast expenditure of more than $200bn, according to the Global Muslim Travel Index, and to $233bn
by the GIER, it will surely be sooner rather than later that this potential
Most multinationals operating in Muslim majority markets have been catering to halal-related market needs for a long time, argues Shikoh.
But now, given the growing exposure, consumer demand and expanding compliance requirements, the world is paying attention.
"More companies are becoming aware, are increasing their compliance considerations and the sectors being affected are broadening," he says.
Amid this backdrop, countries too are emerging as halal leaders
"Dubai has reinvented the halal space under the branding of Islamic Economy, but across different sectors leadership really varies. Malaysia has been a key hub for food and finance in particular, but Turkey has emerged as a key player in modest fashion and travel," says Latif.
Through this momentum the market is expected to move into exciting new areas.
Shikoh cites education, philanthropy, thearts and culture as the next big opportunities in the halal economy. While existing areas including the halal food chain, modest fashion and Muslim-friendly tourism have yet to meet their full potential.
"There are also a number of largely unaddressed opportunities, such as Muslim-focussed peer-to-peer rentals and online meal kit delivery - all of which have high potential," Latif says.
Amid these opportunities, and a potential market estimated to total more than a quarter of the world's population by 2030, one thing is clear. Companies ignore the halal consumer at their own peril.
© Gulf Business 2016