Islamic Digital Economy (IDE)
Driving Investments Through Islamic Digital Economy
Islamic Digital Economy (IDE): Malaysia - A Global Leader
A gateway to global Islamic Digital Economies
1
Fastest Growing Global Population
According to the State of the Global Islamic Economy (SGIE) Report 2023/24, the global Islamic economy has grown from a USD 1.62 trillion consumer-spending market in 2012, to USD 2.29 trillion in 2023, at a growth rate of over 41%.From 2022 to 2060, the worldwide Muslim population is expected to increase by 45.7% from 1.94 billion to 2.83 billion.
2
Growth of Ethical Consumption
The rise of ethical consumerism drives the demand for halal-certified products and services due to shared principles. Besides the financial sector and the food and beverage market, modest fashion, cosmetics, medication, travel, media, and recreation are important segments of the halal market.
The global halal market is worth over USD 2 trillion and is estimated to grow to USD 2.8 trillion in the coming years.
3
Digital Connectivity & Digital Commerce
The adoption and usage of e-commerce and mobile wallet industries among Malaysians have seen a notable increase in 2023 compared to the years before.
The Malaysia e-commerce market size is estimated at USD 10.72 billion in 2024, and is expected to reach USD 20.93 billion by 2029, growing at a CAGR of 14.32%. E-commerce adoption increased from 23% in 2022 to 51% in 2023.
Malaysia’s population is 32.78 million, with an 89.53% mobile internet penetration rate. Around 20 million Malaysians engage in mobile commerce, with 62% of online buyers using mobile platforms.
Unlocking Opportunities in IDE
The global Islamic halal economy is set to reach a market value of USD 7.7 trillion by 2025, more than double the USD 3.2 trillion it reached in 2015 and significantly higher than the USD 5.7 trillion it was valued at in 2021.
Malaysia is well-positioned to be the hub of choice for digital technology companies to capture this market
Social Economy
- Islamic social finance instruments such as waqf, zakat, and sadaqah are seeing a higher uptake with the convergence of ESG and development finance.
- In July 2023, it is estimated that the value of Waqf assets globally range from USD 100 billion to USD 1 trillion. In Malaysia, waqf assets are estimated to be worth more than RM1.3 trillion. In 2022, close to RM4 billion in total zakat was collected by various zakat institutions in Malaysia.
- Transparency and accountability of waqf and zakat are industry pain points.
- Technology solutions providers have opportunities to unlock the economic potential of waqf and zakat through digital adoption initiatives.
Islamic Finance
- The global Islamic finance industry has increased its assets size by 11% to USD 4.5 trillion (RM21.2 trillion) in 2022.
- Malaysia's market share is approximately 24%.
- Global Islamic finance assets are expected to reach USD 5.96 trillion by 2026.
- The estimated global Islamic fintech market size in 2022/23 was USD 138 billion.
- The global Islamic Fintech market size is projected to grow at 17.3% CAGR to USD 306 billion by 2027.
Halal & Lifestyle
- The global halal industry is estimated to be worth around USD 2.3 trillion (excluding Islamic finance). Growing at an estimated annual rate of 20%, the industry is valued at about USD 560 billion a year.
- Malaysia’s halal industry is projected to expand to USD 113.2 billion by 2030, with a GDP contribution of 8.1% by 2025 through the Halal Industry Master Plan 2030 (HIMP 2030).
- As of June 2023, the Department of Islamic Development Malaysia (JAKIM) has recognised 84 Foreign Halal Certification Bodies (FHCB) from 47 countries.
Social Economy
- Islamic social finance instruments such as waqf, zakat, and sadaqah are seeing a higher uptake with the convergence of ESG and development finance.
- In July 2023, it is estimated that the value of Waqf assets globally range from USD 100 billion to USD 1 trillion. In Malaysia, waqf assets are estimated to be worth more than RM1.3 trillion. In 2022, close to RM4 billion in total zakat was collected by various zakat institutions in Malaysia.
- Transparency and accountability of waqf and zakat are industry pain points.
- Technology solutions providers have opportunities to unlock the economic potential of waqf and zakat through digital adoption initiatives.
Islamic Finance
- The global Islamic finance industry has increased its assets size by 11% to USD 4.5 trillion (RM21.2 trillion) in 2022.
- Malaysia's market share is approximately 24%.
- Global Islamic finance assets are expected to reach USD 5.96 trillion by 2026.
- The estimated global Islamic fintech market size in 2022/23 was USD 138 billion.
- The global Islamic Fintech market size is projected to grow at 17.3% CAGR to USD 306 billion by 2027.
Why Malaysia as a Global Hub?
Malaysia is a goldilocks country with strong value propositions for digital tech start-ups and scale-ups to land and expand into the regional and global Islamic digital economies.
1
Global leadership
in Islamic Finance and Islamic Fintech within the Global Islamic Economy
2
A mature Islamic Finance and Halal ecosystem backed by strong talent and Shariah experts
3
Innovation centre with many of the world's first market movers in Islamic Finance solutions, products, and services
4
Robust Islamic Finance
and Halal industry represented by world class bodies and organisations
5
Strong regulatory support with definitive guidelines for Islamic fintech and Shariah-compliant investments.
6
World’s leading Islamic financial technology hub with the highest number of IDE companies
Need more information?
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