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Business is urged to see opportunity in Muslim community

Business is urged to see opportunity in
Muslim community

             

 

From   May 21, 2007   

McDonald’s has been testing halal chicken burgers at its diner in Southall, West London. Boots is running a trial of halal baby food in 30 stores. Tesco, which, like other supermarkets, sells meat certified by Islamic organisations at some stores, is looking to include new products, such as ready meals. All are chasing what could be, according to the advertising agency JWT, Britain’s biggest untapped niche market.

A survey commissioned by JWT, believed to be the first of its kind to focus on the needs of two million Muslim consumers in the UK, says that businesses should strive to understand Islam and how the religion influences its followers’ spending habits.

The agency argues that the Muslim market in the UK is certain to grow: it comprises 3 per cent of the population, is Britain’s second-largest faith group and has the youngest age profile. Although Muslims are among the most deprived groups in Britain, collectively they have an estimated spending power of £20.5 billion. There are also more than 5,000 Muslim millionaires holding assets worth at least £3.6 billion.

JWT’s study, Marketing to Muslims, comes as retailers and consumer goods companies are stepping up their efforts to woo Muslim customers. Nestlé, the world’s biggest producer of halal food, is eyeing the UK market. Last year, the Swiss group exported more halal products from Malaysia to Britain than ever before.

“A lot of the big multinational players in the food industry are going halal,” said Nordin Abdullah, of KasehDia, a Malaysian consultancy that organised the second World Halal Forum in Kuala Lumpur this month. “What they are starting to realise now is in the UK and Europe there are these identifiable Muslim markets.”

To be considered halal, products have to be free of alcohol and pork and animals must be slaughtered according to Islamic law.

JWT claims to be the first global agency to identify Muslims as a consumer group and compares it to the Hispanic market in America. Marian Salzman, the chief marketing officer of JWT, said: “Twenty years ago, if you said ‘Hispanic’ I’m not sure people would even know what you meant. Today it makes up about 15 per cent of American consumerism.”

Ms Salzman, a New York-based trendsetter who helped to popularise the terms “metro-sexual” and “singleton”, said that some companies were wary of targeting Muslims or including them in their advertising campaigns for fear of being labelled “Muslim brands” or offending the mainstream population, especially after the September 11 and July 7 attacks. Yet many others were showing greater interest in Muslim consumers and JWT is encouraging clients, including Unilever, Nestlé, HSBC, Esteé Lauder and Johnson & Johnson, to develop strategies to reach them.

“Before the project, we wondered whether strong religious faith might mean that Muslims would be less materialistic,” she said. “That may be true for some, but we’ve found that being a good Muslim doesn’t stop people from being enthusiastic participants in consumer society.”

For its study, JWT carried out interviews with 350 Muslims and consulted a panel of Muslim professionals in law, business and the media. It published a separate survey of Muslims in the United States last month. Although British Muslims have diverse backgrounds, as consumers they are unified in three areas, Ms Salzman said. They want halal food, and increasingly, cosmetics; Sharia financial products – because the Koran bans payment of interest; and modest clothing.

Islamic banking is making headway in Britain, with HSBC and Lloyds TSB offering Sharia-compliant mortgages and accounts, but Ms Salzman believes that there are big opportunities for clothing retailers. “I’m looking to convince H&M to go into a line of conservative clothing,” she said. “Young women said: ‘Tell H&M to sell more conservative clothing we can enjoy, especially long sleeves in the summer’.”

This is unlikely to happen soon because H&M makes few adjustments to its range, even in Muslim markets, such as Kuwait, a spokeswoman said: “We don’t do special collections for a special group of people. We follow the latest international trends.”

Among food retailers, Tesco is poised to become a big player in the British halal industry, worth £700 million according to a 2001 Mintel report. Last September, it announced plans to bring £148 million of Malaysian halal products to the UK over the next five years.

Nestlé Malaysia says that there is a growing market for halal products in the UK. A spokesman said: “Initially halal was focused on Muslim markets, but now the demand for halal products is growing from the rest of the world.”

The numbers

–– Muslims are 3 per cent of the UK population and 52 per cent of the nonChristian religious population
–– 34 per cent of Muslims were aged under 16 in 2001, against 25 per cent of Sikhs, 21 per cent of Hindus and 18 per cent of Christians
–– A fifth of Muslims were self-employed in 2004, against one in ten Christians
–– 52 per cent of Muslims owned their home in 2001, against 82 per cent of Sikhs
–– Unemployment among Muslim men was 14 per cent in 2004, the highest rate in Britain, against 4 per cent among Christian men
–– Unemployment among Muslim women was 15 per cent, against 4 per cent for Christian and Jewish women
–– Since 2003 the Islamic mortgage market has grown to £500 million. The UK halal industry is worth about £700 million
–– 38 per cent of UK Muslims live in London
–– 45 per cent of Muslims in Britain were born here

Sources: Office for National Statistics, Foreign and Commonwealth Office, Treasury, Mintel, JWT