LONDON, June 29 (APP)- 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 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. The value of Muslim trade is assessed as worth trillions of dollars worldwide.“The Muslim market represents a significant untapped market,” says Dr.Paul Temporal, an Associate Fellow at Saïd Business School’s Executive Education Centre, University of Oxford. (source)
“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. Islamic markets could present a potentially greater opportunity for growth with comparatively little competition from international or local brands.
While some Western brands have been active in these markets since the 90s, there is potential for other products and services to enter these markets. With relentless competitive pressure elsewhere and many companies facing hits to their bottom line as traditional markets continue to under perform, Muslim markets could represent a valuable opportunity for many companies.”
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.
“It is clear that Islam as a religion influences the needs and wants of its followers” says Temporal. “There is the opportunity therefore to develop brands that appeal to this global population. The global Halal food market is estimated to be worth around US$650 billion annually, for instance. 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.”
A number of Islamic countries are developing rapidly socially and economically. As global citizens, significant numbers within these populations aspire to branded goods and services both from Western and indigenous providers. But understanding the subtleties of these markets and the drivers of consumer behaviour are key to success.
“The Muslim market is not homogenous” says Dr. 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. Lifestyle products such as fast food, personal care, fashion, cosmetics, media products including social media and digital products are all likely to benefit from this demographic trend. 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. HSBC and Standard Chartered are already developing products for these markets but there is plenty of room for more entrants and for further product innovation. Halal medicines and vaccines are also likely to grow rapidly.”
But Western brands should not expect to have it all their own way. “An increasing challenge will come from indigenous brands which are developing in response to successful introductions from multinationals,” says Dr. Temporal who has written a book titled “Islamic Branding and Marketing: Creating a Global Islamic Business.”
He 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.
While some Western brands have been active in these markets since the 90s, there is potential for other products and services to enter these markets. With relentless competitive pressure elsewhere and many companies facing hits to their bottom line as traditional markets continue to under perform, Muslim markets could represent a valuable opportunity for many companies.”
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.
“It is clear that Islam as a religion influences the needs and wants of its followers” says Temporal. “There is the opportunity therefore to develop brands that appeal to this global population. The global Halal food market is estimated to be worth around US$650 billion annually, for instance. 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.”
A number of Islamic countries are developing rapidly socially and economically. As global citizens, significant numbers within these populations aspire to branded goods and services both from Western and indigenous providers. But understanding the subtleties of these markets and the drivers of consumer behaviour are key to success.
“The Muslim market is not homogenous” says Dr. 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. Lifestyle products such as fast food, personal care, fashion, cosmetics, media products including social media and digital products are all likely to benefit from this demographic trend. 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. HSBC and Standard Chartered are already developing products for these markets but there is plenty of room for more entrants and for further product innovation. Halal medicines and vaccines are also likely to grow rapidly.”
But Western brands should not expect to have it all their own way. “An increasing challenge will come from indigenous brands which are developing in response to successful introductions from multinationals,” says Dr. Temporal who has written a book titled “Islamic Branding and Marketing: Creating a Global Islamic Business.”
He 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.
Source : http://ftpapp.app.com.pk/en_/index.php?option=com_content&task=view&id=143587&Itemid=39 - June 29, 2011
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