Embracing the Islamic opportunity


As Fleishman-Hillard launches its Majlis practice, Yusuf Hatia offers valuable insights into the reputation management and communications issues faced by corporations seeking to engage with a global market made up of more than 1.8 billion Muslim consumers  

Yusuf-Hatia

Islamic finance and Halal food have become major industries around the world. What are the challenges for companies seeking to expand into these markets?

The Halal certification and finance markets amount to a multi-trillion US dollar opportunity. However, these markets can be fragmented and unstructured. Islamic finance is a good example: the potential is huge, but the industry lacks product development and is limited in skilled human capital. Another key challenge is in marketing because an emphasis is placed almost entirely on products versus investor needs. Also, potential customers are faced with a barrage of complex terminology.

A plain-speaking approach and active outreach to educate non-Muslim financial institutions and consumers in Islamic finance are key needs. Companies such as HSBC and UBS have achieved this to some extent, but a sustained and coordinated effort to explain the underlying concepts of Islamic finance is required to expand the market.
The underlying message here is that companies need to develop a much fuller understanding of the Muslim market and consumer, while working on reputation management and learning how to best engage this growing demographic.

There are sensitivities and common misconceptions around the Halal and Islamic finance industries. How important is it for corporations to address these in their communications approach?

In some parts of the world, Halal has become synonymous with food and is mainly associated with the ritual slaughter of livestock, leading to misunderstandings and public perception issues. This has narrowed the focus for many organizations, as Halal has become a negative term in some geographies. Halal certification is, of course, a much wider concept that also covers areas such as pharmaceutical and cosmetics products.

Similarly, some people link Islamic finance to a distinctive legal framework,giving rise to sensitivity among certain consumers. Or, it is associated with interest free banking,contrasting with conventional financial practices.

Knowing more about relevant principles and codes of conduct, and communicating with consumers – Muslim and non-Muslims alike – in an open and transparent way, have therefore become critical issues for corporations.

Does the media fully engage on issues, such as those relating to Halal?

Until recently, Halal certification has received limited attention, with coverage appearing mainly in specialist media or when a negative story breaks in mainstream channels. However, as the market has grown in size and spending power, prompting more companies to address Muslim consumers, the media is now featuring more coverage of Muslim consumer issues and the Halal certification opportunity.

Governments, exchanges and other organizations from London to New York and Malaysia are seeking to emphasize their Islamic credentials, particularly in finance. How can they develop their messaging in this space?

Obvious geographies involved inIslamic finance include Malaysia, the Middle East and Indonesia – but countries such as Australia, the U.K. and U.S. are also appearing on the radar. In the area of Halal certified food, many countries are working hard to develop hubs to address the Muslim consumer market.

In all cases, company reputation is absolutely key. The average Muslim consumer has grown up scrutinizing details and checking credentials of non-Muslim organizations, so governments and corporations need to demonstrate knowledge, transparency and credibility.

And messaging must be genuine.An example of what could be described as “paying lip service” occurred in 2009 when the U.K. government announced an intention to establish London as the the world’s Islamic financial gateway.However, the government then decided not to issue a sovereign Sukuk (Islamic bond), leading some to believe that the U.K. market had lost interest,and therefore momentum, in pursuit of the Islamic finance opportunity.

What more can the mainstream food industry do to underline its credentials in terms of adhering to Halal principles?

Companies like Nestlé are already conducting significant business in the Muslim consumer market, with Halal-related purchases accounting for as much as 20 percent of the company’s global sales. Nestlé works diligently to showcase its Halal certification credentials, which are based on a commitment to understand and develop Halal protocols. These efforts include a 30 page checklist that must be applied against each product.Such a thorough approach has created a positive reputation for Nestlé among Muslim consumers.

Policy issues in these areas are significant, so how big is the PA industry’s potential role in this regard?

The potential for PA work in addressing the Halal certification market is immense. This is especially evident when considering the number of governments involved and the advocacy work that needs to be done. Such PA activity is currently limited to niche practitioners, with many organizations struggling to find the right counsel to help them navigate policy issues accurately and productively.

Part of the problem lies in the PA industry not having the requisite knowledge and skills to understand an incredibly complex market that is difficult to penetrate without the benefit of expert advice. PA firms need to broaden their appeal and employ people with a suitably rounded understanding and experience of the Muslim market opportunity.

Fleishman-Hillard Majlis was established as a specialist offering with this consideration in mind. We believe that our understanding of the public affairs environment, coupled with knowledge of the many issues surrounding Muslim markets and consumers,enables us to offer a valuable service.

There are cultural and religious dimensions to the Muslim consumer market. Does this therefore set it apart in terms of communication needs? Does it make communications more challenging?

The Muslim market is unique in that it is globally dispersed, multiethnic and multicultural, but unified by distinctive values and moral principles. This market therefore presents new opportunities alongside risks. An uninformed approach can seriously damage a company’s reputation and impact negatively on sales strategies.The communications challenges are great, but as the market becomes increasingly more lucrative, corporations will recognize the importance of communicating knowledgeably with a market that amounts to nearly two billion consumers.

Yusuf Hatia is the managing director of client services, Fleishman-Hillard India and is leading the company’s new Majlis practice, which focuses on the opportunities involved in the growing Islamic market
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Follow this link to download the Fleishman-Hillard white paper “The Next Billion: The Market Opportunity of the Muslim World”.

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