Muslim consumer market still untapped

| 03/03/2008 | Reply

Companies targeting growth must increase focus on Muslim consumers who
are now recognised as a strong and growing global segment.

 According to AT
Kearney, a global strategic management consulting firm, companies
should consider how to best tap into the Muslim consumer market for
Shariah-compliant products and services with a global worth of
estimated $2 trillion (Dh7.34trn) annually.

 It
is estimated that 20 per cent of the world’s population today is
Muslim; yet to date only a few global companies have realised this and
aligned their supply chains to be compliant with Islam.

 

“While
businesses have targeted ethnic groups for years, there are relatively
few cases of global target segmentation based on religion,” said
Maktoum Al Maktoum, Director of AT Kearney Middle East.

 While
some industries are already advanced in terms of aligning their
businesses to Muslim values and Shariah compliance, others, from a
global perspective, are still in their infancy.

 Fashion
and cosmetics are excellent examples, representing an opportunity to
incorporate Islamic values such as modesty, halal and haram. Like food
and beverage companies, apparel and cosmetics firms should consider the
degree of Shariah compliance required and take into account the entire
supply chain from procurement contracting with halal suppliers, to
production, logistics and marketing. The global market for fashion
apparel is worth $800 billion with the highest spending per capita in
the Middle East and Malaysia.

 “Growth
strategies for the Middle East demand thinking out of the box. Extra
care in aligning strategies of global fashion apparel and cosmetic
firms present enormous opportunities,” said Dr Dirk Buchta,
Vice-President and Managing Director of AT Kearney Middle East.

 The
market for halal cosmetics is also growing on a global basis, on
average 12 per cent annually, and it is estimated that the total value
of cosmetic related sales in the Middle East reached $8bn, of which
Dubai is estimated to represent $500 million. In the Middle East
consumers seek specific halal-endorsed products, as Muslim women who
choose to wear cosmetics may prefer those that are prepared without
pork fat – a common ingredient in many products.

 Cosmetics
and bodycare firms have not fully adopted halal practices when
manufacturing their products, even in predominantly Muslim countries,
however, some companies are striving to appeal to the Muslim consumer.
For example, the Body Shop, a major retailer in the Middle East, boasts
products with natural ingredients and its stance against animal testing
makes it a viable player in this market. Despite its Western origins,
the Body Shop’s marketing efforts are in line with Muslim values.

 “A
few corporations are now realising how much Muslim marketing they can
produce without alienating their other customers. The Body Shop and
Colgate-Palmolive are just a couple of examples of companies tapping
into this large consumer segment,” said Dr Buchta.

 Although
aligning products with Muslim values may not be of primary concern to
the major global cosmetic and fashion apparel manufacturers, firms in
this sector should consider the global potential of this market.

Category: Middle East & Africa, Personal Care

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