Can Indonesia Become the Mecca of Islamic Fashion?

Ahead of the Islamic Ramadan and Idul Fitri celebrations, consumption tends to increase in Indonesia. One of the products that is searched for by Indonesian consumers (those who adhere to Islam) is Muslim fashion such as clothes and the veil. In fact, the Indonesian government wants the nation to become Asia’s center for Muslim fashion by the year 2018 and the world’s Muslim fashion leader by 2020. Muslim clothes are also envisaged to become a key export product. Currently, Indonesia’s Muslim fashion exports are still rather insignificant. Based on the ‘State of the Global Islamic Economy Report 2015-2016’, the world’s Muslim fashion market was valued at USD $230 billion in 2014 and is estimated to be worth USD $327 billion before 2020, implying that Muslim fashion is among the fastest growing industries worldwide. Obviously those nations that harbor a large Muslim population have the potential to become an important force with regard to Muslim fashion. Indonesia is one of these countries. This nation – Southeast Asia’s largest economy – has the largest Muslim population in the world with more than 210 million Muslims (nearly 90 percent of the total population), implying the market is huge (although there are also millions and millions of nominal Muslims in Indonesia who do not follow the Islamic teachings strictly – or not at all – and prefer to follow Western fashion trends). However, data show that demand for Islamic fashion is on the rise in Indonesia. Currently, the nation ranks fifth in terms of the world’s largest Muslim fashion markets with a value of USD $12.7 billion. The leading nations are Turkey, United Arab Emirates, Nigeria and Saudi Arabia (see table below). World’s Largest Islamic Fashion Markets:

Country      Value (USD billion)
Turkey      24.84
United Arab Emirates      18.24
Nigeria      14.99
Saudi Arabia      14.73
Indonesia      12.69
Russia      10.92
Egypt      10.73
Pakistan      10.52
India       9.78
Iran       8.99

Source: State of the Global Islamic Economy Report 2015-2016 However, as an exporter of Muslim clothes Indonesia’s role on the world market is still rather insignificant. According to data from Indonesia’s Trade Ministry, Indonesia’s Muslim clothes exports were worth USD $4.63 billion in 2014 (up 2.3 percent from the value in the preceding year). However, exports declined slightly to USD $4.57 billion in 2015. In the first month of 2016 exports of Islamic fashion was back on track, rising 2.13 percent (y/y). Key export markets of Indonesia for Islamic clothing are the USA, Japan, Germany, South Korea, Britain, Australia, and Canada. However, Indonesia still lags far behind the leading Islamic fashion exporting nations i.e. China, India, and Turkey. Indonesia’s Export of Islamic Fashion:

2013 2014 2015 January   2016
Export Muslim Fashion (in USD billion)  4.53  4.63  4.57   0.37

Source: Trade Ministry of Indonesia The Indonesian government wants to have turned Indonesia into the ‘Mecca of Islamic fashion’ by 2020, one of the many (perhaps overly) ambitious targets of the government. However, becoming the center of the global Islamic fashion industry implies becoming the trendsetter in this industry, becoming the (quality) standard, the production hub, the center of consumption, and one of the leading exporters. To overtake established powers such as China and Turkey seems a very difficult undertaking. For example, production costs in China and Turkey where there already exists major production centers are much lower compared to Indonesia (Indonesia still needs to import 60 percent of raw materials required to produce Muslim fashion). Indonesia does have strong points as well. Not just because of the huge amount of Islamic consumers who live in the country – constituting a great market – but also because there exists a major pool of creativity within Indonesia considering that Islam has blended with the various local pre-Islamic cultures. At the Muslim Fashion Festival Indonesia (MUFFEST) 2016, held in Jakarta between 25-29 May in Jakarta, there were 50 designers – originating from from countries including Turkey, Italy, Russia, United Arab Emirates and Bangladesh – showcasing more than 200 brands. This event was organized by Indonesia’s Trade Ministry in cooperation with the Indonesian Fashion Chamber (IFC) and supported by Hijabers Mom Community (HMC). This event also included workshops, seminars, a design competition and much more. Source of Article: indonesia-investments.com

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