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.
Annual global worth of Shariah-compliant products and services
Annual growth of the international market for halal cosmetics
‘Muslim consumer market still untapped’