Halal Industry 

CASE STUDY-Iba, India’s first halal-certified cosmetics firm

| 26 November, 2015 | Case Study
 Enricko Lukman

IBA HALAL CARE

CEO

Mauli Teli

Founded

September 2014

Headquarters

Ahmedabad, India

Investment into brand

$151,000

RevenueNot disclosed

COMPANY OVERVIEW

Iba Halal Care positions itself as India’s first halal-certified cosmetics brand. Launched in September 2014, Iba’s products are both halal and vegan, which essentially means that they are free of animal fat and animal-derived products like keratin, collagen and gelatin as well as being alcohol-free.

The firm claims that all products are free of any harsh chemicals (such as sulphates and parabens) and are cruelty-free. The products, which were created by personal care manufacturer Ecotrail, are made at the Sanand factory of Ecotrail Personal Care , which created the Iba product line. All Iba products have been certified by Halal India, a local halal certification body.

Iba sells more than 75 products, including creams and lotions, facial care products, shampoos, color cosmetics and exotic fragrances. Its products are sold both online and in local brick-and-mortar stores. So far, the firm has invested nearly Rs 10 million ($151,000) into the brand.

OPPORTUNITIES BEING ADDRESSED

  1. With more than 172 million Muslims, India has the third-largest Muslim population in the world, after Indonesia and Pakistan.
  2. The cosmetics market in India was worth $4.75 billion in 2011 and has been estimated to grow at a compound annual growth rate (CAGR) of 17 percent from 2011 to 2015.
  3. The global halal cosmetics market is worth $13 billion. The sector is expected to grow at a CAGR of 11 percent between 2014 to 2018.

HALAL MARKET STRATEGY

  1. Iba works with advisory panels consisting of experts in halal certification, FMCG and retail chains, among others.
  2. The company started out by selling their products exclusively at standalone stores. This gave them the advantage of being able to interact with customers and educate them about the brand philosophy. More recently, Iba products have become more widely available through franchising and online stores.
  3. Iba is positioned as a “masstige” brand. The product pricing is competitive compared to other brands, as this enables customers to easily switch brands and try Iba products.
  4. After receiving enquiries from the Middle East, Africa, and Europe, the company has announced its plans to expand to other markets in early 2016.

 

 

CHALLENGES

  1. Since the halal cosmetics market is still a new concept in India, Iba is faced with the challenge of educating consumers–Muslims and non-Muslims–about the concept of halal cosmetics. The halal cosmetics market is still  niche in India, where Muslims constitute about 14 percent of the population.
  2. Halal cosmetics contain natural preservatives that are gentler on the skin. But using less harsh ingredients can restrict shelf life, and product distribution has to be more efficiently managed.
  3. There is a constant need for more intensive product research and development for halal products, which leads to higher overhead costs.
  4. In order to get halal certification, Iba has to invest a lot of effort to ensure its ingredients, as well as its manufacturing site and processes, pass halal auditing. This includes reaching out to ingredient suppliers and having them provide certifications that their supply chain is well monitored.
KEY TAKEAWAYS

Barrier to entry: It requires huge amount of effort to ensure all ingredients, supplies and production processes pass halal audits             

A growing market: The halal cosmetics market in India has huge growth potential.

Marketing: Anyone eager enough to delve into this sector must invest time and money to educate the market.

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