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.
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."
