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The Muslim consumer: building your brand for a fast-growing segment Category: ConsumerHomeIndustry News UK & WorldMarketingTrends

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6/1/12  blogs.ft.com

By Beyondbrics

By Shelina Janmohamed of Ogilvy Noor

It’s the beginning of 2012 and you’ve come into work determined to flex your marketing muscles and really make a splash for your brand by growing a new segment. Where should you look? The Muslim consumer.

Here’s why: a global population of 1.8bn people who say their faith shapes their consumption choices. It’s a market estimated at $2.1tr. And its movers and shakers are the ‘Futurists’: predominantly young, tech-savvy Muslims who take pride in their faith but embrace modernity, marketing and – most of all – brands.

So here are three tips on engaging with this lucrative, untapped and potentially very loyal consumer base: focus on finance, fashion and food.

1. Money, money, money

The Islamic finance industry is set to grow in size and stature. Its assets are already estimated at about $1tr. That may be a tiny amount compared to conventional finance but Deutsche Bank estimates it will almost double to $1.8 trillion by 2016 as a reduction in conventional lending pushes companies towards alternative financing methods. Ernst & Young points out that Islamic finance has already expanded at a compound annual growth rate of 20 per cent in the last three years, compared to 9 per cent for conventional finance.

Add to this companies like Emirates Airline which says it is looking to the Islamic finance market to fund aircraft deliveries as European banks back out of deals due to the eurozone crisis. Or that some big Western banks are turning to sukuk, Islamic bonds. HSBCCredit Agricole even South Africa to name but three have all issued or are considering issuing sukuk.

And unless you’ve been locked in a dark room for the last 12 months you will know that the Arab Spring has spawned governments that are likely to look favourably towards Islamic finance, partly for possible ideological reasons but more likely because it can help them attract Islamic investment funds in the Gulf.

In retail banking, Islamic banks are popping up in places from Oman to Nigeria to Malaysia to the Gulf. This comes alongside Islamic finance windows opening in conventional banks, and staff being trained in delivering Islamic finance products to consumers. And no wonder. As the world’s financial markets lurch from one crisis to the next, consumers are wondering if there are better, safer and more ethical alternatives.

The challenge for this industry is to spend time thinking about how it engages with consumers. It really needs to show that it listens to their concerns and is not just ordinary finance dressed up in different clothes. What really makes Islamic finance both a better deal and Islamic too? The key is to communicate the benefits simply, clearly and on their own merits. The word ‘Islamic’ won’t be enough to engage with consumers. Communicating values and consumer benefits by connecting to core Islamic and ethical principles will reap success.

2. Have you thought about going ‘halal’?

According to Malik Musharaf, vice president of Malaysia’s Halal Industry Development corporation, the global halal ecosystem is worth “more than $2.3tr annually and is fast gaining attention worldwide”.  He says the halal eco-system cuts across many industries, ranging from halal food and non-food products to halal-related services, including Islamic banking and finance, halal logistics, tourism and healthcare.

Halal means products follow Islamic prescription as well as being ethically delivered. Meat should be slaughtered in line with Islamic prescriptions which are very similar (but not identical) to kosher guidelines. And any products with meat or meat derivative ingredients must also comply. Products with alcohol or pork derivatives are not permitted.

To get your meat into some markets like Oman, halal certification is becoming a mandatory requirement. Halal is also on the upswing in countries like Austria, Germany and Switzerland. Halal compliance can create preference for your product and attract business, as suggested by this encouragement in Malaysia for Chinese restaurateurs to attract local and visiting Muslim restaurant goers. And one of the fastest growing segments of US beef exports are halal products, according to the US Meat Export Federation, underlining the idea that halal certification improves brand preference.

It’s possible that your product is already considered ‘halal’ and all it needs is an appropriate body to certify it as such. Or it may take a simple and small adjustment of an ingredient which affects neither quality nor cost to achieve this. For little effort, huge gains can be made.

First, demonstrate that you are aware of the needs of Muslim consumers. Second, invest what could be just a small amount to verify your products are halal. Next, ensure that the halal status is clearly communicated. What worries some brands is whether to shout about this or not. You don’t need to. Simple, clear and well-documented verification of halal status is the key step.

Muslim communities will help to spread the news and ensure that their peers purchase your products because they are halal. Good examples are Tom’s of Maine, Cabot Cheese and Tangerine Confectionery.

Getting your products halal certified might have more benefits than you expect, helping you reach a wider consumer base. Food producers say that consumers see kosher and halal products as safer, healthier and better for them.

Halal beauty products are increasingly catering to a consumer base that seeks purer, more natural, ethical as well as traditional ingredients, and finds that halal certified products meet the bill.

The Dutch company Innova Market Insights identified ten key trends to impact the food and beverage market through 2012 and beyond. The top trends relate to purity, authenticity and sustainability. Halal has a specific technical meaning but it also has wider connotations of purity, wholesomeness and environmental sensitivity, which Muslim consumers are adopting with increasing enthusiasm. More and more halal companies and consumers are investigating the entire ‘farm to fork’ lifecycle, which means that the halal, organic and ethical markets are likely to intersect in a big way.

3. Hijab-chic

In 2012 Muslim fashion will hit the global scene in a big way. The Islamic Fashion Festival will be going to Milan Fashion week, which means Muslim fashion will go international in size, reach and influence. In Turkey, a women’s magazine exploring the crossover between fashion and faith became so popular that it isoutselling Vogue and Elle.

So ask yourself, will your brand be the one of the pioneers that grabs first mover advantage, talking and engaging with Muslim consumers? According to Bloomberg it’s a market worth around $96 billion dollars. You’d like a slice – even a sliver – wouldn’t you?

They key to targeting this consumer is to understand that Muslim women – and of course it is women in particular – increasingly see no conflict between faith and fashion. In fact, today’s Futurist Muslim consumers see fashion precisely as an expression of their faith and are proud to wear their faith, literally, on their sleeves. So please, no frumpy out-dated styles, this segment wants cutting edge, fashion forward lines with brands that are proud to demonstrate their modest credentials.

The great thing for brands is that these modest parameters are consistent across the globe; the variation is in local colour and heritage. Currently this landscape is populated by start-up brands and online retail is the medium of choice. The first mainstream brand to bring a line to market and make it available in store – and note that it is not only Muslim women who are interested in modest dress, so the potential market is much larger than estimated here – is likely to elicit strong brand preference in this affluent, brand loyal and underserved segment.

In fact, this final principle will hold you in good stead whichever of our top tips you embrace. If 2011 has shown us anything, it is that the Muslim market is a rising force, both politically and economically. With six of the Next 11 being majority Muslim markets, the Gulf Cooperation Council being a rising economic force and India and China’s huge Muslim minorities, the Muslim consumer segment is an opportunity you need to put on your to-do list right now.

Shelina Janmohamed is a senior strategist at Ogilvy Noor, a specialist consultancy for building brands with Muslim consumers. Ogilvy Noor is part of Ogilvy & Mather.


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