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Economy

Malaysia's halal trade gets e-commerce push

Alibaba.com, local players promote products marketed to Muslims

The 14th Malaysia International Halal Showcase in Kuala Lumpur attracted 580 exhibitors from 33 countries.

KUALA LUMPUR -- Malaysia is turning up the emphasis on e-commerce in its efforts to establish itself as a global hub for halal products.

The Southeast Asian country expects exports of halal products, both food and non-food items, to exceed 50 billion ringgit ($11 billion) annually by 2020, up from 39.3 billion ringgit in 2016.

"The industry should also adapt to the growing dynamism of globalization, e-commerce and the changing megatrends," said Deputy Prime Minister Ahmad Zahid Hamidi on Wednesday at an annual halal fair in Kuala Lumpur.

For the first time, market movers like China's Alibaba.com, a unit of Alibaba Group Holding, are attending the Malaysia International Halal Showcase, which is in its 14th  year promoting goods and services consumed by the Muslims.

Malaysia has identified the halal industry as a major economic growth engine. In 2015, it contributed 7.5% to gross national product. The target for 2020 is 8.7%.

The government is also keen to tap opportunities arising from China's One Belt One Road initiative to promote cross-border trade and investment. There are about 30 million Muslims in China, and the halal market there is growing at 10% annually.

"Halal is high on the agenda when it comes to collaboration among governments," said Hamidi. One examples is Malaysia offering halal assistance to Japan as it prepares for the 2020 Olympic Games in Tokyo.

Malaysian halal exports are dominated by food and beverages, but demand for non-food items such as palm oil derivatives and cosmetics are on the rise. According to official statistics, China, Japan, Indonesia, and the U.S. are among major buyers of these products.

By engaging the marketplace more effectively, the government wants to help small enterprises reach out globally. Companies in Malaysia receive government subsidies to advertise on Alibaba.com, which offers a business-to-business trading platform for millions of products from 190 countries.

Homegrown players such as Aladdin Street.com and Zilzar.com are also competing for the global halal market, which is expected to grow to $3.7 trillion in 2019. It was valued at $2.3 trillion in 2015.

Jack Ma, Alibaba Group's co-founder and executive chairman, pledged last month to help Malaysia's e-commerce initiatives. His company is setting up a warehouse and logistics hub at Kuala Lumpur International Airport by the end of the year to improve its regional e-fulfillment capacity.

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