Muslim Consumers Grow More Important in All Categories – “It’s young, it’s big, and it’s getting bigger”

Time.com has a great article on selling to Muslim consumers across the world.  We’ve written previously on the market potential of halal foods and the article on Time gives a broader picture on halal products and the growth of the sector and new tendencies among Muslim consumers. The buying power of American Muslims alone is estimated at a hefty $170 billion annually even though Europe is said to be the biggest growth region according to the Halal Journal.

To keep growing, halal firms know they can’t simply rely on religion. “Ideology does not fit within a consumer mindset,” observes Zahed Amanullah, European managing director of the California-based Zabihah.com, an online guide to the global halal marketplace. “At the end of the day, people will not buy halal simply because it’s halal. They’re going to buy quality food. Ideology doesn’t make a better-tasting burger, a better car, or a better computer.”

Some examples of companies already catering to muslim consumers:

• Swiss food giant Nestlé is a pioneer in the field. It set up its halal committee way back in the 1980s, and has long had facilities to keep its halal and non-halal products separated. Turnover in halal products was $3.6 billion last year, and 75 of the company’s 456 factories are geared for halal production.

• For non-food companies like South Korea’s LG and Finnish cell-phone giant Nokia, targeting Muslims is also big business. LG offers an application to help users find the direction of Mecca, while Nokia has free downloadable recitations from the Koran and maps showing the locations of major mosques in the Middle East. Such offerings increase brand loyalty, according to market research by the Finland-based Muslim lifestyle portal Muxlim.com. “There’s a lot of room out there for mainstream brands to appeal to Muslims without making changes to their products,” says Muxlim.com’s CEO Mohamed El-Fatatry. “It’s just about their marketing messages, about showing that this brand is interested in them as consumers.”

By the numbers …
16% — Halal’s share of global food industry
$632 billion— Annual halal food market
1.6 billion— Worldwide Muslim population

A Halal Shopping Cart
From fast food to fashion, the sector is thriving

Food
Non-Muslim multi-nationals such as KFC, Nestlé, Tesco and McDonald’s have expanded their Muslim-friendly offerings and now control an estimated 90% of the global halal market.. But Muslim-
owned manufacturers such as Dubai-based Al Islami — which sells everything 
 from chicken burgers to packaged ingredients — are growing fast. Domino’s now sources halal pepperoni from a Malaysian company for the pizzas it sells from Kuala Lumpur to Birmingham; KFC is testing halal-only stores in Muslim areas of the U.K., and the Subway sandwich chain has halal franchises across Britain and Ireland.

Lifestyle
Muslims — many of them young and increasingly middle-class — are buying more magazines, such as U.K.-based Emel, and halal cosmetics made, like these Saaf products, without alcohol or animal fats, which Islam considers haram, or forbidden. For Muslim women concerned about skin-care products containing alcohol or lipsticks that use animal fats, a few cosmetics firms are creating halal makeup lines. Drug companies such as the U.K.’s Principle Healthcare and Canada’s Duchesnay now sell halal vitamins free of the gelatins and other animal derivatives that some Islamic scholars say make mainstream products haram, or unlawful.

Finance
The burgeoning Islamic finance industry is using the global economic crisis to win new non-Muslim customers. Investors are attracted by Islamic banking’s more conservative approach: Islamic law forbids banks from charging interest (though customers pay fees) and many scholars discourage investment in excessively leveraged companies. Though it currently accounts for just 1% of the global market, the Islamic finance industry’s value is growing at around 15% a year, and could reach $4 trillion in five years, up from $500 billion today, according to a 2008 report from Moody’s Investors Service.

Services
Hotels run along Islamic lines, such as Dubai’s Villa Rotana, offer quieter and more family-friendly places to stay. Banks that operate according to Shari’a law 
 are doing well during 
 the global downturn because they tend to be 
 more conservative.

Source: http://www.time.com/time/magazine/article/0,9171,1898247-1,00.html

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