Globalising the halal brand

The key to any branding approach is in knowing and understanding the potential market, and here lies the problem for the halal sector

Mustafa Adil, OpinionIndustry Expert
Mustafa Adil is the Head of Islamic Finance under Emerging Businesses for Thomson Reuters. He is responsible for leading various content propositions including Islamic finance, green economy and fintech. Prior to joining Thomson Reuters, Mustafa was a leading consultant with Ernst & Young. He is a qualified Chartered Accountant from the Institute of Chartered Accountants of England & Wales and holds a Bachelors degree in Mathematics from Imperial College in London.

October 16, 2018

ISLAMIC FINANCE LIFE

Halal products are a huge global market, estimated at $5.73 trillion in 2016 and growing in line with a rising Muslim population and easier availability of halal products, but given Muslims are forecast to account for around a quarter of the world’s population by 2030 the halal economy is still nowhere near its potential size.

Many business managers today are looking to the huge Chinese and Indian markets to grow their businesses but all too often overlook the even larger Muslim market. One challenge in addressing this shortfall is how to brand halal products so as to maximise sales.

The key to any branding approach is in knowing and understanding the potential market, and here lies the problem. The market is not uniform even within the Muslim world, and given that a rising share of the market for some halal products, such as halal cosmetics and food, is not even Muslim, this widens the variety of consumer to target even more.

Although the global Muslim community, the ummah, shares many characteristics, it is also divided by geography, language, culture, affluence, and degrees of religiosity, and what works for one market may not work for another. To this end, it will be necessary for businesses not always to run a single branding and marketing campaign, but often to adopt multiple strategies to capture different market segments. But one key area in capturing this market is halal branding.

A halal product is one that is permissible under Islamic law. The best known halal obligations concern food and drink, particularly those barring alcohol or pig-based products and concerning the method of animal slaughter. Another growing and influential area is Islamic finance, which among other things prohibits charging or paying interest. But there are other halal areas too. Resorts and hotels in the halal tourism serve only halal food, sell no alcoholic drinks, and provide women-only swimming and sunbathing facilities. Women’s halal fashion is modest, has no prints or patterns depicting animals and, for example, has sleeves that can easily be turned up for washing before prayer. Halal cosmetics contain no alcohol, chemicals or animal products and can therefore do not need to be washed off before prayer.

One challenge for businesses promoting halal products is how to brand them in a way that despite the religious strictures makes them nevertheless attractive, particularly to younger people – an increasingly important demographic in the Muslim world. Among the topics to be discussed at the Fourth Global Islamic Economy Summit to be held October 30-31 in Dubai is how to create Islamic brands that are “cool, universal and ethical”.

If this can be done, it could be possible to extend the market for halal products into even non-Muslim markets. One clear example here is provided by halal cosmetics, where an absence of alcohol, chemicals and animal products make them attractive to vegetarians, vegans and others opposed to animal cruelty, and to people with sensitive skin.

Islamic finance is another area of interest to growing numbers of non-Muslims, particularly for its preference for profit-sharing arrangements over charging interest, and for its emphasis on ethical values in finance – something of particular concern to millennial investors after the global financial crisis of 2008.

But there is no denying that while some of the ethical aspects of Islamic brands can attract a wider Western market, there is still among many in the West an aversion to Muslim products, and this presents another big challenge for those seeking to penetrate a more global market – branding designed to attract Muslim consumers through its Islamic religious and cultural values may if pushed too aggressively deter buyers in other markets and of other religions for those same reasons.

Ironically, this doesn’t seem to work against many halal food brands introduced by such Western giants as Nestle, McDonalds, KFC or Subway, or halal cosmetics produced by L’Oreal. This demonstrates the existing huge loyalty to such Western brands but also shows that halal branding can be a help rather than hindrance to growing global sales, and that a carefully presented halal brand might equally assist Muslim businesses in growing sales.

Added to this, halal branding which focuses on a product’s ethical qualities can not only grow sales in a global market, but can maybe do much to soften Western consumers’ perceptions and help narrow the gap between the Muslim and non-Muslim worlds. The world is changing fast and the giant brands of today may not be so giant tomorrow.

With the right mixture of speed, innovation and cultural sensitivity, there is no reason why halal branded products cannot go global.

The Global Islamic Economy Summit (GIES) is the world’s largest and most comprehensive forum dedicated to the Islamic economy. It is organised by the Dubai Chamber of Commerce and Industry and Dubai Islamic Economy Development Centre (DIEDC) and strategically supported by Thomson Reuters.

Any opinions expressed here are the author’s own.

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