This consumer segment has shown an ever-increasing attractiveness to businesses, especially through the Halal and Islamic Finance sectors. With the industry’s global annual summit coming up in Kuala Lumpur in April, businesses will be able to see firsthand the opportunities available.
The big question for business working in and looking to get a foothold in the Halal and Shari’ah-related industry is: Do you understand who your customers are and what they want?
This invariably ties in with a discussion i had with a friend in the Islamic Finance industry: ‘is Halal and Shari’ah a process or are they value concepts?’
Whilst the (current) issue of convergence (of the Islamic Finance and Halal industries) and its potential or even explosive growth and emergence of new product and service segments (fashion, cosmetics, hospitality) are being thrashed out, the key issues of the day are:
Consumer intelligence (i.e. insight for business growth planning);
Comprehension (i.e. understanding of the two terms Halal and Shari’ah by the consumer); and
Knowledge of (what) the latent emotional need (of the consumer) means with regards to a value system presented by the commercial enterprises.
A great deal of consumer and industry research has been done, by highly experienced and professional organisations, covering specific areas of information that’s extremely helpful in business planning. Yet, on the ground, activities by Halal and Islamic Finance organisations still demonstrate a high extent of “head-in-the-clouds” style of business approach.
In essence, this disregard of the consumer element within these industries will be at their own peril. The consumer world has changed and even more-so the Muslim consumer world, which illustrates a new kind of consumer, who many have called the ‘futurist’.
This ‘futurist’ is acutely aware of what he or she wants and how you as a business must engage him or her. Do not think you can fob the ‘futurist’ off with a few buzz words or empty rhetoric.
As part of the ever-growing and maturing global Muslim community (as the mainstay for both Halal and Islamic Finance) the ‘futurist’ has shown a paradigm shift in attitude, perception and behaviour. it is time we actually listen and take on board what this consumer base – of Halal and Islamic Finance products and services – is saying. This would help in identifying what the value benefits (of Halal and Shari’ah) are and how commercial businesses can use this knowledge to develop their business strategies.
The starting point is for the two sectors to get consumer-centric and undertake market education and research analysis on the two basic terms – Halal and Shari’ah compliant. Then they must establish the value benefits of the two.
Halal and Shari’ah compliance is seen to be ‘must-have’ supports (for the product or service) and not, in itself a differentiator.
With this in mind, we must develop business strategies that enable the community (in which the business transacts) to grow. Without the planned growth of the community no commercial business can survive for long in today’s climate of the discerning and connected consumer. Take the strategy to the masses, through social media, and drum up high awareness of the commercial purpose of the businesses and clearly show how it aids the community. Add to the mix a strong quality control on products (and services) and you have a winning formula that works cross-borders and builds the business year-on-year.
Recently the Swiss banking group, Bank Sarasin, released a Wealth management report on the increased value of converting a conventional business into a Shari’ah-compliant entity. the report, which was initiated through a consumer question, found there was little information out there for people and from a business perspective, Shari’ah-compliance boost business by 18 to 25 per cent.
If this isn’t enough, it is vital to note that the Muslim numbers in India and china are larger than the population of some other countries. An estimated combined population of 180 million – how can this demographic be ignored or worse still not engaged?
Business cannot afford to overlook the Muslim segment, but on the contrary engage this segment through accurate, identifiable and clever marketing. If we take the view point that Muslims want to see a Halal and Islamic Finance industry attractive to both Muslims and non-Muslims, then one has to look at how that industry is being publicised and how it is viewed.
Let’s take a consumer, who loves pizza. a mainstream company like dominoes has gone out of its way to engage consumers through digital marketing, apps and creating a strong product desire by involving the consumer in feeling and believing he or she is a part of the process that makes dominoes good at what it does.
This concept of creating a connection and knowledge understanding is what brings the consumer closer to the product or services. And this is what the Halal and Shari’ah-compliant industries need to do better in.
Going back to my point, this cannot be done through a ‘head-in-the-clouds’ attitude – in other words, throwing pieces in the air to see where they land will not bring about consumer intelligence, comprehension and Knowledge of the Halal and Shari’ah industries.
is this business utopia? The simple answer is NO.
This is just effortless and logical planning, which comes from being consumer-centric. It utilises the knowledge gained from understanding the consumer and in delivering value benefits to the community (or the environment in which the business operates).
The question to ask is: would businesses, in both Halal and the Islamic Finance industry, actually re-build a better business model and approach from doing this? to answer it, organisations would need to undergo a cultural shift in terms of the way business is done today. A shift away from stakeholder profitability to community value creation based on the ethical values embodied within Shari’ah and to focus on being consumer-centric in order to be sustainably competitive over time.
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About the Author: Joy Abdullah is a strategic management professional, specialising in cross-industry strategic planning. Currently he is head of Marketing and Communication at InCeIF- The Global Islamic Finance university.