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Trade
Muslim Market Emerges
as a New Global Target
The Muslim market is emerging
as a new global target for international
corporations. With a population
of about 1.6 billion, the
Muslim market represents a high
level of economic power, population
growth, and prospensity to
consume based on its rich natural
resources, which explains why this
region became an alluring marketplace
for many big corporations.
According to Lee Donghun, chief
researcher at Samsung Economic
Research Institute, "Although they
have a strong image of being closed
and stoic, many Muslim people are
actually active in purchasing luxury
real estate, cars, and other premium
products apart from basic necessities.
The Muslim culture, despite
being geographically scattered,
forms a huge market for their religious
homogeneity," he explained.
In fact, the unique characteristics of
the Muslim culture made it a tough
market for many foreign companies
to get through. However, "once you
succeed in entering the market, it
gives you a huge advantage in terms of the market share. But you
need to build market strategies carefully as the religious values are
deeply rooted in every corner of their daily life," said Lee
Donghun. Distinctiveness is found in clothing and fashion industries
as well. Due to the strict prohibition of idolatry, promoting
images of living creatures is prohibited, therefore this principle
can be applied to product design, packaging, and even messages
in advertisements. One of the Korean companies that made a
shrewd use of such rules is Galalab, an online game developer.
The company removed character designs and background music
as well as other patterns such as the cross and star, before taking
on the Middle Eastern market, in which their product is currently
the third most popular online game.
By Lee Dong-hun, Research fellow of SERI (serildh@seri.org)
Also, Mr. Lee emphasized, "halal
certification is vital in the food
and beverage sector," adding that
"in order to export to Muslim markets
not only the ingredient and materials,
but also the manufacturing
plants need the certification. Such
strict censorship is now expanding
to pharmaceuticals and cosmetics.
Early on, the global food company
Nestle famously focused its efforts
on the Muslim market, and established
themselves as a leader in the
global halal food industry.
Another important factor to remember
is the rule of cash transaction.
"Islamic finance forbids charging
interest for lending money, so it
is a crucial principle to bring cash
for a transaction," explained Mr.
Lee. The cash-based Islamic finance
system showed relatively solid
performance even during the recent
global financial crisis, making
themselves a case study for the non-
Muslim regions. In addition, HSBS
Amanah, a financial institution
which specializes in Muslim banking,
was selected the best international Islamic financial institution
by EUROMONEY in February 2010. "Active 'halal' businesses
are required as part of an effort to create a new market,"
Mr. Lee concluded. "Korean companies in particular should first
secure the Southeast Asian market, taking advantage of their experience
in the region, before advancing to Middle East and global
Muslim markets. The importance of understanding the religious
and cultural particularities of Muslim, of course, cannot be
stressed enough. It's noteworthy to mention that the influence of
word of mouth is more prominant than in other cultures, they
need to fully utilize the young consumer base for improving their
image and promoting the products."
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