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This study aims to examine the mediating role of government support programs in the halal cosmetics and personal care industry between local demand conditions and competitive advantage.

Data were collected from 96 companies in the cosmetics and personal care industry in Malaysia, and the analysis was conducted using the partial least squares structural equation modeling approach.

The results indicate that demand conditions do not have a direct effect on competitive advantage in the halal cosmetics and personal care industry. However, government support programs, specifically regulatory and innovation programs, play a crucial mediating role between demand conditions and competitive advantage. This highlights the importance of both regulatory and innovation programs in shaping the halal market ecosystem.

The halal industry policy should prioritize innovation and regulatory programs to ensure that nonfood halal products, including beauty products, are evaluated not only based on ingredient content but also on broader aspects such as product effectiveness, quality, safety and affordability.

This study offers a unique perspective by highlighting the often-overlooked role of government support programs as key drivers in shaping the halal market ecosystem and enhancing competition in the halal cosmetics and personal care industry. While the government’s role is frequently neglected in market dynamics, this research emphasizes how government intervention, when implemented through effective policy, can significantly contribute to industry growth and competitiveness.