Opinion: Why Southeast Asia will be the leader in Islamic marketing

Islamic marketing is touted to be the next big thing for marketers across the world because of the huge and growing potential market for Islamic products and services, that Islam has a decisive influence on Muslim consumers’ wants and needs, and due to the fact that there are less and less political and legal barriers to the expansion of Islamic products and services.  

While there are huge opportunities in this space, catering to it is difficult because of the vast differences that exist within the Islamic community. To help marketers with their plans and strategies, here are some key considerations and tips to entering and succeeding in this sector.  

The global Islamic potential 

Today, there are 57 countries in the Organisation of Islamic Cooperation with vast differences between them. In terms of population size, for example, they can range from more than 225 million Muslims in Indonesia to about 300,000 in Brunei. 

Some countries are very rich in terms of GDP per capita such as Qatar, with close to US$100,000 per head and per year, while others are less wealthy like Somalia with just US$900 GDP per head and per year. While these differences exist, what is important from the marketing point of view is that these countries, except for war-ridden ones, experience an increase in GDP that is higher than the world’s average. 

At the same time, the growth of the Muslim population is the highest compared to all other religions. In 2030, it is estimated that Muslims will represent 26% of total world population. Putting together population and GDP increase, it would be wise for companies across Southeast Asia - as well as globally – to consider how they can tap in this growing market. 

Two considerations when targeting the Muslim market 

In the past there were very few categories of Islamic products. Traditionally, the most common were halal food and modest clothes, and occasions such as Ramadan or Aid ul Adha were considered the most auspicious moments for the sale of these. 

Since the decolonization movement after WWII and the significant emigration of Muslim populations to Western countries, we’ve seen the market expand not just in Muslim countries but worldwide. Today there are countless initiatives in different industries from across the world. 

Danone and Coca-Cola launched halal water, halal Coca-Cola was first released in Southeast Asia, BRF from Brazil inundated the whole world with its Sadia halal chicken, Awakening Music from London made Sami Yusuf and Maher Zain faith-based music global superstars, Japan and South Korea compete to attract Muslim tourists, and Kuwait Finance House launched Islamic banks in Europe, just to name a few. 

The reason these are good examples, is because the companies understand the needs and requirements of their target Muslim audience and cater to them accordingly. Wherever you look, it’s quite clear there are a range of products and services that companies and countries are willing to fight for the Muslim dollars. 

While there are huge opportunities, there are challenges that Southeast Asian companies should be aware of too. These challenges stem from the fact that the Islamic market is incredibly diverse, and the study of the environment is essential. There are two key pillars marketers need to pay attention to when tapping into the Muslim market: 

The first key consideration is the socio-cultural environment. It’s worth noting that the behaviour of the consumer will be radically different according to the attitudes relative to hierarchy, modesty, and risk-taking. As such, marketers need to carefully think about the use of dynamic elements of culture such as art or standards of beauty in advertisement.  

Additionally, while in the past it was common to consider one country as one market, this is no more the case and is an important point to remember when developing marketing plans. For instance, consumption patterns and attention paid to the certification of halal products are different in cities like Kelantan and Aceh, the strongholds of Islamic conservatism in Malaysia and Indonesia, compared to Kuala Lumpur and Jakarta respectively. 

Secondly, understanding the political-legal environment is critical. Marketers need to familiarise themselves with this because the implementation of the shariah law will vary greatly according to the school of jurisprudence in that market. For example, in Southeast Asia the Shafi’i school is dominant, while Hanbali school is found in Saudi. As a result, some products and services offered in Malaysia, such as halal water or halal coconut, will not be offered in Saudi.   

The opportunity for Southeast Asia 

With the opportunities that lie ahead, the question is: Which region is best paced to profit from this trend? From my observation, it seems like Southeast Asia has sufficient traction to lead the Muslim world. 

Malaysia and Indonesia have always been rivals when it comes to halal food, and it is expected that this competition will continue over the next few years. Malaysia has been a leader because of its sophisticated market and world-renowned certification process, which has attracted the likes of Nestlé and BRF from Brazil, the biggest seller of halal meat in the world. Indonesia, on the other hand, has also attracted giants such as Unilever, which established its Muslim Centre of Excellence as the world halal hub for the company. 

Other Southeast Asia markets are slowly catching up and catering to the demand too. Singapore, for example, has a booming Muslim market. There are abundant halal eating options in the nation state, including fast food giants such as McDonald’s, KFC and Pizza Hut, as well as halal eateries in food-courts. Not to mention, while Singapore is a country with a Muslim-minority, it does have the biggest choice of Muslim-friendly options in the world, stretching from halal food to the organization of the Hajj. Taking this into consideration, other countries with Muslim-minority populations would be wise to follow Singapore’s model to gain good traction in this space.    

COVID-19 has hit all countries indiscriminately. While the economic outlook will take time to recover, consumption will bounce back and it would be wise for marketers to prepare now for the rebound of the economy and form their marketing strategies sooner, rather than later. 

Ultimately, for those looking to target the Muslim population, it is key to recognise the vast differences within the community and to understand the socio-cultural and political-legal environments of their target audience in order to truly be successful. 

The writer is Cedomir Nestorovic, ESSEC professor of geopolitics and Islamic business and director of the ESSEC and Mannheim Executive MBA Asia Pacific.

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