If you consider that in the next 17 years, there will be 2.2 billion Muslims in the world, the size of the population of China and India put together, your views as a marketing and research professional on the “Next Billion” may get somewhat altered. And if you knew that more than 60% of them will be in Asia Pacific, you might be wondering how to understand them better as consumers.
The importance of Islamic consumers doesn’t arise solely from the sheer numbers but more from the fact that just like the BRIC consumers, large proportions of them are crossing the basic consumption threshold levels. More of them can now be categorized as “middle class”. This is exactly the same reason why the world started chasing the BRIC consumers about ten years back.
Some of the fastest growing countries, in GDP terms, in the world today are those with an Islamic majority. Some of the front-runners in this group are countries like Indonesia, Turkey, Nigeria (all present in the newly coined term MINT to replace BRIC), Saudi Arabia, Qatar, Bangladesh, Uzbekistan, Kazakhistan and countries of North and West Africa. Notwithstanding the fact that the new found affluence is coming due to an overwhelming demand for commodities and natural resources in the developed world, these countries have now started to experience consumerism – however, the path will be different due to the commonality of their beliefs. The fact that on an average, the TFR (total fertility rate) of Muslim countries is higher than that on non-Muslim countries will ensure that the number of consumers to access will be attractive for a long time to come.
At this point, I would like to warn that it would be fallacious to assume that all of these 2.2 billion will have homogenous lifestyles and values. The Muslim community is varied and going through its own churn. However, they are united by a set of common values that have a lasting impact on their lifestyles.
Islamic Values that influence consumption behaviour
The main value systems that impacts every good Muslim household are as follows :
a) The Five Pillars of Islam
1. The fact that there is One God and there will be no idol worship – the Prophet being God’s messenger 2. Praying five times a day 3. Fasting and self-control during Ramadan 4. Zakat or giving 2.5% of one’s income to charity 5. Hajj or pilgrimage to Mecca once in the lifetime.
b) The laws of the ‘Sharia’: Muslims are taught to live as per Sharia values from a young age. Sharia applies to all walks of life – diet, childcare, family, food and drinks ( halal ), punishments, inheritance and judicial matters.
Understanding of these value systems are critical to explain what works well with the average Islamic consumer and what doesn’t. Because of various interpretations and adoptions in different Muslim countries, these laws are difficult to decode and are interpreted in different ways in each Muslim country. And yet there are similarities across nations as well.
With rising commercial activity and economic affluence, a lot of “Islam friendly” brands are being established from within the community and are finding relevance with even non-Islamic consumers.
Growth in Muslim consumerism.
The Halal food market is growing at an amazing pace. The Halal market in 2011-12 was estimated to be worth a staggering US$2.1 trillion a year and is increasing at US$500 billion a year due to growth of the global Muslim population. Moreover, the “halal” concept is now being extended into categories other than food – fashion, beauty products, tourism, media and even education.
The global market for Islamic tourism has been growing exponentially. Recognising the potential of this market, in 2012, the Rusutsu Resort in Hokkaido Japan declared itself to be the first Halal certified resort in Japan and opened its doors for Islamic travellers!
Islamic banking assets have been valued at $1.1 trillion in 2012. Islamic Banking, in its most ethical form doesn’t charge interest from its customers as interest is considered “haram” (impure) in Islam. As a concept, Islamic Banking has a larger appeal and is getting increasingly popular amongst non-Muslims especially in the US and Germany.
Islamic communities are spread all over the world. It is estimated that they occupy 72 countries and in the next 15 years, it will grow to occupy more. Europe alone has 38 million Muslims while China has more Muslims than Syria. These communities will also impact the larger culture within which they are nestled.
These facts indicate the importance of understanding this community especially for large consumer product companies who have dominant positions in Asian markets. As for the Marketing Research industry, the implications would be the following:
1. Tracking: There is a need to track Muslim consumers and develop a “knowledge practice” which is specific
to the behaviours that they exhibit. For each category or brand, market research analysts need to be looking out for specific trends in the data which could be ascribable to the “Muslim consumer” and his belief systems.
2. Understanding: Look at consumers from the lens of Islamic values or behaviours prescribed by the “Sharia” laws. This will reveal trends and patterns, which are then very useful for predicting behavior. So for example, appreciating the fact that Middle East has a very lucrative market for non-alcoholic beer can also be explained by the fact that Muslims are prohibited alcohol as per Sharia and yet there is a latent desire to consume. The action on the brand can be therefore what more can you do within the category to ride on this trend? Or that Body Shop is one of the highest preferred brands amongst Muslim consumers comes from the fact that in Sharia law, people have to consume hygiene and beauty products that are chemical free and pure of any animal fat. Purity as a concept has high traction amongst Muslims.
3. Consultation: When consulting clients on their research designs, look out for specific behaviours that need to be investigated under the lens of the “5 Pillars of Islam” or the “Sharia laws”. Many anomalies and outlier behaviours may be explained due to these beliefs and will be invaluable for designing effective brand campaigns for consumers.
As a brand or business, the issue is to think about how one can target this community? Is it necessary to have a “halal” certification for all the brands that they consume? The surprising answer may be a “no”. The 2010 Ogilvy Noor Brand Index listed the most Sharia compliant brands globally and the top 5 were Lipton, Nestle, Nescafe, Nido and Kraft.
The Sharia values are essentially about fundamental human values. The need is to soul-search and find out how each brand can increase relevance for this community and as researchers, what values we need to investigate and track in our surveys in order to map and understand them better.
By Nandini Das Ghoshal, Partner and Co-founder at Insights & More