The cosmetics and haircare brand and OEM manufacturer has centered its strategy on developing more business in countries like Indonesia, the world's biggest Islamic nation, as well as India, home to nearly 200m Muslims, Pakistan and the Middle East.
But to do so it has had to bring manufacturing base of its best-known Chinese line to Malaysia, because of the country's position as the leader in halal certification.
"If you want to enter halal markets, branding yourself as a Chinese manufacturer is very hard," said Tick Lee, chief operating officer of Vee Man Holding, the brand parent of Savee, Misslady and distributor of Opal, the biggest shower gel and hair treatment brand In Hong Kong and Taiwan.
While the company also manufactures its Savee and Misslady brands at its Malaysian factory in Subang Jaya, it will also have to bring production of Opal to the country, to accommodate the halal market.
“We see Malaysia as a stepping stone for Opal to penetrate the halal market. It’s a huge market in terms of Indonesia, South Asia and the Arab countries. These are all big markets but they are also markets we couldn’t enter, though we have tried hard over the last 10 years,” said Lee.
“Even though Opal is certified halal in China, that doesn’t matter. Muslim countries want to have products certified by JAKIM,” he added, referring to the Malaysian government-run halal certification body, considered the gold standard across the world.
A halal stepping stone
Indonesia also has a strong standards body, though this is under transition as the country prepares for a new halal law. Lee had looked into opening a factory there before deciding on Malaysia as the better option. It was very difficult to get raw materials into Indonesia.
“A lot of people thought that Indonesia should be the place for our plant but it’s not possible, not that friendly,” said Lee.
“If you set up a manufacturing plant there, you may have a problem unless your product is very standard with only a couple of ingredients. Cosmetic ingredients are very difficult to import, but in Malaysia it’s much easier.”
This, he says, is why his partners wanted to work with Vee Man. The company also plans to set up a much bigger plant in Malaysia.
The company isn’t the only one in the cosmetics and personal care world to have identified Malaysia as the ideal starting point for penetrating new halal markets.
AmorePacific, South Korea’s biggest cosmetics manufacturer invested a reported US$96 in 2017 in a massive new factory in the southern state of Johor that’s set to open next year.
The move was to boost sales in Southeast Asia, which at the time accounted for just 3% of AmorePacific’s sales—a figure the company wants to triple through greater access to Asia’s halal markets.
“They are taking a big step into the halal market. The halal market is growing faster than the world market. That is the huge market we are all looking at,” said Lee.
With halal production and a respectable certification body behind the logo, Lee is now looking for distributors in mostly halal countries. India, the Middle East and Africa are top of the list of his targets for channels to grow the markets, as well as Russia, which will have halal products formulated for the colder weather there.