According to its figures, the halal market is worth roughly $2.1 trillion (LE 14.14 trillion), and because of the booming Muslim population, is growing at half a trillion dollars a year. With many Arab Spring countries selecting the Islamic brand in their politics, it seems that markets in these countries are now starting to pay attention to these new preferences.
Younger generations, in particular, have been forming new tastes and preferences that are distinct from their parents. Ogilvy Noor calls Muslims under 30 ‘the new Muslim consumer’, or ‘the Futurist’, one who is more individualistic and ambitious than the mainstream Muslim consumer.
As well, young Muslims are referred to as ‘Traditionalists’, according to a report released in February 2011, on their direct, potential effects on the Arab Spring including Muslim consumer trends.
Between one-half and two-thirds of Egypt’s 84 million people fall into the under-30 category, and as a result, the country’s banking, tourism and food services sectors have become a vibrant experimental ground for halal branding.
According to the Ogilvy report, the Futurists are also more tied to their Muslim identity than previous generations and want to associate with brands that can elaborate on this identity.
Finance is one realm where Islamic branding has been making inroads in Egypt, and demonstrates the potential — or at least potential claims, by some — of the Islamic brand in opening up new markets. In February, the controversial sukuk (Islamic bonds) law went for review by the Shura Council following approval from the Cabinet, after somewhat staggering claims from Egypt’s finance minister they could bring in revenues up to $10 billion (LE 67.33 billion) per annum.
Although deprived of its Islamist banner after a plea was rejected by Al-Azhar in late 2012, there remains continued interest by banks as varied as Barclays, JP Morgan, and Islamic Development Bank to explore the benefits of the instrument.
Barclays Egypt in particular is looking to the sukuk as a measure to expand its lending to SMEs, which they see as accounting for roughly 70% of economic growth in Egypt, according to Bloomberg.
Also in February, the National Development Bank (NBD) announced an $110 million (LE 740.66 million) Islamic syndication for the renovation of the East Delta Electricity Company, the first public project financed entirely through Islamic bonds.
A December 2011 research paper on Islamic banking by Habibollah Javanmard and Ensiyeh Nemati Nia, two Iranian scholars, titled “Effect of Internal Branding on Brand Supporting Behaviors of Employees Regarding Customer Attention in Islamic Banking”, claims there is a definitive positive relationship between the strength of the Islamic brand, employee behavior, and ultimately, overall customer satisfaction and retention.
Using the service marketing triangle as a model — company, provider, customer — the Islamic brand serves as a mechanism for commitment from each of these parties in achieving the promise of the Islamic brand, which is living a life more compliant to the tenets and requirements of shariah.
“The company tries to be in touch with its customers, and delivers its promises to customers,” the paper claims. “Delivering such promises depends on the employees who during their service period, keep or break such promises . Consequently, service growth and profitability are achieved.”
But these observations are also applicable in other sectors, where Islamic branding has been making an appearance. D.cappuccino Café, a local coffee chain that began only in 2012, in Nasr City.
Attempting to present itself as an “Islamic” alternative to the Western coffee chains ubiquitous in Egypt, such as Cilantro, Costa Coffee and Starbucks, it has seating segregated by gender, with reservations available for family reserved areas.
The owners were reluctant to speak to Business Today, citing constant misrepresentation by the press and underlining the accusations constantly leveled at these endeavors, namely, that they seek to impose a strict Islamic agenda on society that ultimately curbs individual freedoms.
However, many marketing experts argue that catering to the distinct needs of such a sizable emerging market has economic, rather than ideological, drivers. According to Ogilvy Noor, greater empathy on behalf of companies for Muslim consumers means greater access to young Muslims who are educated, connected and potential tastemakers.
In appreciating the role that their faith plays in their lives, a company ensures greater customer satisfaction and retention.
Miles Young, CEO of Ogilvy, said at the first Inaugural Oxford Global Islamic Branding and Marketing Forum at the University of Oxford in 2010, “Yes, this is a market bigger than India or China is, and yet it receives a tiny fraction of the attention.
And it is not just that the numbers are there, but the value is also. The GDP of the five largest Middle Eastern countries is the same size as India, but for population, is approximately one-third of it. Most global enterprises, whether from the West or the East, have a BRICS strategy, and many are starting to look at ‘Next Eleven’ in the same way (group of second-tier emerging markets),” where 53% of the population are Muslim.
The Swiss-based global food giant Nestlé has been the pioneering example for a Western company trying to tap into the power of Islamic branding. In 2008, Nestlé achieved $5.2 billion (LE 35.01 billion) in revenue in halal products alone, according to Young.
According to the company, “85 out of Nestlé’s 456 factories worldwide are halal-certified”, and has its own board, the Nestlé Halal Committee, that reviews its products according to halal specifications before sending them for official certification. The company also is making headway in Europe, targeting countries such as England, France and Germany. bt