The Muslim market is large, lucrative and underserved. Technically, it is the single biggest consumer market in the world – bigger than India and China - but treated differently because it isn’t limited to a geography, race or culture. And, at a time when companies are looking to find the next billion consumers the Muslim market presents a unique opportunity.
Islamic doctrine, by and large, is not ascetic and does not discourage trade or consumerism. Likewise, it does not divide the state from religion, which means that Muslims practice their faith hand in hand with the political, social and cultural roles they play in society. So, the concept of a Muslim market or a Muslim consumer, we believe, is a valid one.
Consider some of the demographic data that makes this consumer very interesting. The global Muslim population is expected to grow by about 35 percent over the next 20 years, rising from 1.6 billion in 2010 to 2.2 billion by 2030, or over a quarter of the world’s total projected population of 8.3 billion. By 2050, the Muslim population could grow to 2.6 billion and represent nearly 30 percent of the global projected population.
By 2030, 79 countries are expected to hold a million or more Muslim residents, from the current 72 countries. A majority of the world’s Muslims (more than 60 percent) will continue to live in the Asia Pacific region, while about 20 percent will live in the Middle East and North Africa. Muslims will remain relatively small minorities in Europe and the Americas, but will constitute a growing share of the total population in these regions. To be successful in Asia, as well as the Middle East and North Africa, companies must learn to understand and address the Muslim market on a large scale.
One demographic factor makes the Muslim market even more attractive to companies -- it is largely young and part of an emerging middle class on the road to greater consumption. Some of these consumers will bank, use branded products and go online for the first time and are likely to follow brands that are relevant to them and speak their language.
In Islamic majority and minority countries throughout Asia, the Middle East, Africa, and Europe, business activity is escalating, with Islamic trade currently estimated in trillions of dollars.
Excluding Islamic finance and banking, the global Halal market is valued at about $2.3 trillion. The worldwide Halal food market alone is worth an estimated US$650 billion or more and is close to 17 percent of the global food industry. A leading professor at a US university recently made the bold statement that any food company that doesn’t have a Halal strategy can’t consider itself to be a global company. It explains why companies like Nestle are betting big on the Halal opportunity.
At the end of 2011, assets compliant with Islamic banking topped the US$1 trillion mark and recorded another year of double-digit growth. The Halal pharmaceutical industry is estimated by some analysts to be worth as much as $500 billion while the Halal cosmetics market is worth around US$13billion and growing at a compound annual rate of about 12 percent.
Companies are starting to understand the great opportunity that the Muslim consumer represents. But addressing this market is not as straightforward as dealing with other billion population consumer markets such as India and China. For a start, the Muslim community is not a single homogeneous group. Muslims live in every country in the world, represent every race and come from every social and economic stratum. And although they share the common thread of their beliefs, they have their own cultural, regional or local nuances, preferences and practices.
The diversity of the Muslim consumer can prove to be a challenge to those who view markets as geographies and for whom the concept of an Islamic consciousness operating across market frontiers is alien. Neither can the Muslim economy be as easily defined as other cross-border markets such as the "green economy" or the "pink dollar."
For brands that find ways to embrace and engage the Muslim consumer, the rewards are rich. And smart, compelling communications will play a critical role in targeting a consumer market that already represents nearly a quarter of humanity.
These are some of the reasons why FleishmanHillard set up a group last year to better understand the development of the Muslim opportunity, where the greatest potential lies and analyze the communications and reputation issues that companies need to be aware of.
FH Majlis also exists because clients are beginning to ask us questions that we need to answer. We felt it important to adopt a clear position on the opportunity, which is to help both Muslim and non-Muslim organizations navigate the market and provide some pointers that companies need to consider.
We believe that the next four to five years will see this market become more pronounced as the consumer base grows – in size and spending power – and companies need to have a clearer understanding of the opportunity and a strategy to adapt their brands to the Muslim consumer.
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Yusuf Hatia is senior VP/managing director of FleishmanHillard’s Mumbai office.