Is “TaqwaTech” the future of the Islamic Economy?

In recent years, businesses across various sectors have been focusing their attention on creating products and services that aren’t just appealing, but also conform to the religious requirements of the Islamic faith. And there’s a good reason for that… almost two trillion reasons, to be precise.

Over the last decade or so, the Islamic sector has grown to command a significant portion of the global economy; with Thomson-Reuters putting the estimated figure at US$1.9 trillion in 2015 for consumer spending alone. The Islamic Finance sector is estimated to hold a further US$2 trillion in assets. This surge is driven by an emergent Muslim middle class - young professionals who embrace modern trends such as travel, fashion, and technology while still placing importance in their faith.

 And it’s not stopping there.

 The Islamic economy is one of the few sectors that is still expected to grow over the next decade, with the consumer sector projected to be worth US$3 trillion by 2021; mostly driven by key industries such as Halal food, modest fashion, and Halal tourism.

This robust growth, along with the relative infancy of this sector, has also opened a new window of opportunity for entrepreneurs; giving rise to many a startup clamoring to secure themselves a slice of the Halal pie.

 Enter TaqwaTech 

An amalgamation of the words “Taqwa”, a core concept in Islam usually defined as vigilance against displeasing the Almighty, and “Technology”; TaqwaTech is a relatively recent term coined by Venture Capitalist Gobi Partners to define the new category of Muslim entrepreneurs or startups focusing on using technology to serve the product- and religion-based demands of the Islamic Economy.

 “We created this term because the old joke in the venture capital industry is that venture capitalists can’t invest into something unless there’s an acronym or term for that sector.” - Thomas G. Tsao, founding Partner, Gobi Partners.

With the consumer base largely moving to online and mobile service platforms, there is a huge opportunity for expansion beyond physical borders into the digital sphere - with Malaysia poised to be the hub of the Islamic Digital Economy. As such, Gobi Partners is currently focused on bringing the term into mainstream use in Malaysia before expanding into the rest of Southeast Asia (and beyond!).

 Again, TaqwaTech is a term being applied to an already existing phenomenon, so let’s take a look at how Muslim-focused companies are already making a mark in the tech world…

 Halal food - The bread and butter of the Islamic economy

In 2016, Muslim consumers spent almost a trillion dollars on food, and Halal food is projected to exceed 17% of the world food market in 2018.

However, to equate Halal food to a certain type of dish would be akin to equating Western food with steak and potatoes. Due to the geographical and cultural diversity of Muslims, Halal food can exist in almost any taste and type - within bounds of Islamic dietary restrictions, of course.

So, to put Muslims in touch with the various Halal dining options available in a particular location, The Halal Dining Club is a mobile app from the UK that curates Halal restaurants by tolerance levels from Muslim-friendly (no pork) to Halal-certified. Providing options for the culinary curious to those looking for a taste of home, the app is currently available in limited cities in the UK, Thailand, Singapore, and the United States.

Halal fashion - modestly making it to the catwalk

Halal fashion, also referred to as modest fashion, is also fast gaining popularity among fashion-conscious Muslims who spent US$266 billion on clothing in 2013. Even though high fashion brands like Dolce and Gabbana getting into the scene with a designer collection of hijabs and abayas, the bulk of the growth is believed to lie within e-commerce. 

An example of this is Malaysian fashion brand Naelofar Hijab, who grew into popularity with their line of “instant” hijabs. Initially sold online, the brand gained enough attention through social media to attract customers from 37 countries - with founder Noor Neelofa planning to triple the brand’s overseas sales by 2017.

Naelofar’s headscarves are literally making their way around the world too, as Muslim female pilots from Malaysian budget airline AirAsia will be wearing specially designed hijabs from Naelofar as part of their standard uniform.  

And speaking of pilots…

Halal travel - A new industry taking flight

The idea of Muslim travel has evolved far beyond the religious pilgrimage trips of the Haj and Umrah.

Compared to food and fashion, Halal travel is an industry in its infancy enough to still be considered a niche. The concept of it is simple - to provide holiday arrangements for Muslim travellers that incorporates the requirements of faith without compromising on the quality or enjoyment of the trip itself.

Of the three industries covered, Muslim travel is the smallest contributor to the Muslim economy, with a comparatively “paltry” US$145 billion spent in 2015 according to Salam Standard’s report on the global impact of Muslim tourism. It is, however, also the industry with the highest potential for growth; with a projected value of US$233 billion by 2020. Much of this growth is expected to be driven by young travellers.

As a whole, young travellers don’t just travel more often... they’re also willing to spend more for the experience. Southeast Asia is of particular focus as both an inbound and outbound destination as it’s home to not just 60% of the world’s Muslim population, but also to a swelling number of young middle-class Muslims embracing the idea of travel and annual holiday getaways.

Two names making headway in the Halal travel industry are Salam Standard and Tripfez.

Aside from industry research, Salam Standard is an online hotel reference that provides a rating on how Muslim-friendly hotels are. Following a standardized rating system based on a set of criteria covering amenities and services, hotels can voluntarily apply to be evaluated by an impartial committee. These ratings are kept current through regular inspections and self-assessments.

On the other hand, Tripfez provides travel arrangement services based on the criteria and ratings provided by Salam Standard. Aside from the amenities of luxury such as toiletry and wifi availability, Tripfez travellers can also search for the amenities of faith such as Qibla direction indicators or, better yet, request to have their room prepped in advance with prayer mats or a non-alcoholic minibar if desired (or available).

But even without a Qibla direction indicator in the hotel - or whichever location - apps such as Muslim Pro ensures that time and direction is always available. In fact, Muslim Pro is the leading prayer app of choice with over 45 million downloads across iOS and Android. Bitsmedia, the company behind the app, was acquired for “an eight-digit figure in US Dollars” in August 2017. 

A rose by any other name...

Whether one might call it TaqwaTech or just “Tech-based businesses that bring extra benefits to Muslim consumers”, the bottom line is rather clear that e-commerce is a major driver of the Islamic Economy - much like how it has been to the global economy as a whole.

But beyond the commercial aspects, TaqwaTech can also serve in the social and religious growth of the Muslim community regardless of geographic boundaries. For instance, startup ReciteApp identified a problem area where some Muslims may have difficulty reciting the Quran but are too encumbered by cost, time, or embarrassment to seek guidance. With the app, users can anonymously submit recitals that will be validated and corrected by a pool of credible teachers. Sites such as SimplyGiving also allow Muslims to fulfil their obligations for charity by providing a wide base of religious and nonreligious causes that they can donate to almost anywhere in the world.

As Steve Jobs famously insisted in 1996 - before the term “e-commerce” was even coined - the main beneficiary of the internet is someone who has something to sell and, right now in 2017, that same excitement can be carried forward to the future of the Islamic economy.