GLOBAL – JUNE 2011 – A leading expert on Islamic brands is highlighting the untapped potential in Islamic markets which most companies are failing to exploit. The global Muslim market is now over 20% of the world’s population at around 1.6 billion, and is expected to increase to 2.2 billion by 2030, situated in both those regions where Muslims are in the majority, but also in other countries where Muslims are a significant and growing minority, including those in the West.
"These days, when companies are facing ever stronger competition in established markets and while many companies are rushing into high profile regions such as China, India and Brazil, the single biggest market in the world has been largely overlooked," says Dr. Paul Temporal.
Muslim consumers have been underserved to date with few products tailored to their needs and wants. Western brands often have a cachet and are well-liked, but many of them are not compliant with Shariah law and are not considered to be Halal. This impacts particularly on some product groups such as pharmaceuticals, cosmetics, food stuffs, beverages and financial products, creating valuable market niche opportunities for those companies prepared to cater for Muslim consumer needs.
The global Halal food market is estimated to be worth around US$650 billion annually, for instance," says Temporal. "Companies like Nestle have been manufacturing many of its brands using Halal processes and securing Halal accreditation to fast track its growth in Muslim markets. In 2008 Nestle achieved $5.2 billion revenue in Halal products. Others such as L’Oreal see the potential in personal care and cosmetics, particularly with the growth of the middle class in many Muslim markets. There is huge scope for other brands to exploit these opportunities."
Understanding the subtleties of these markets and the drivers of consumer behaviour are key to success. "The Muslim market is not homogenous," says Paul Temporal. "Within the Muslim market there are many different forms of consumer behaviour that are dependent on a wide range of cultural and religious factors. Different countries also have different requirements in terms of Halal accreditation which complicates things, but despite these differences, successful Islamic products all conform to common Islamic principles and values and Western brands can successfully build upon an understanding of these to grow in these markets.’
"There are a number of emerging market sectors which will offer huge opportunities in the future," says Dr. Temporal. "By 2050, over 60% of the world’s under 18 year olds, will be Muslim. Research suggests these consumers will keep to their Islamic values and will want appropriate products. As Islamic finance continues to expand in double-digit figures annually, this embryonic market will attract many more players, including the big high street names in consumer finance from around the world."
"I foresee a time when these Muslim brands will not only command market share in Muslim majority countries but will begin to take on the household names from Western multinationals in their own markets, appealing to Western Muslims," he concludes.
Dr. Paul Temporal has published a new book on these issues: Islamic Branding and Marketing: Creating a Global Islamic Business.
He is an Associate Fellow at Saïd Business School’s Executive Education Centre, University of Oxford as well as a Visiting Professor in Marketing at Shanghai Jiao Tong University. He has published numerous bestselling books, including Advanced Brand Management, Branding in Asia, Asia’s Star Brands, Romancing the Customer, and The Branding of MTV.
