OriginsInsight Edition 5

Spotlight On … The Islamic Community in Australia

Background

Globally, the Muslim market exceeds 2 billion people, comprising almost 30 percent of the world’s population.  Ogilvy Noor (a subsidiary of Ogilvy Mathers that was established to specialise in Muslim-specific advertising) estimated in 2012 a combined spending power of US$2.1 trillion per annum.¹

More than 60% of the Muslim population resides in the Asia Pacific region and with many Australian companies and brands now operating globally, regionally and locally, marketers need to understand muslim culture to connect with this significant emerging market.

The Islamic population in Australia is significant and is one of the fastest growing communities. According to the 2011 Census there were almost half a million people in Australia who identified as being Islamic – the third largest identified religious group after Christianity and Buddhism.  The Islamic population grew by around 135,000 people from 2006 to 2011 – up  almost 40 percent compared with overall population growth of just over 8 percent.²

Relatively Untapped Market

Despite the large and increasing size of the Islamic population in Australia and worldwide, the group is largely overlooked in targeted marketing.  Few organisations have committed resources and effort to understanding the Muslim market and packaging and promoting products around their needs.

Australian marketers can learn from the US and Canada where market size (more than 4.8m Muslims³) is a key driver of research.  In 2007 JWT undertook a project consisting of face-to-face and telephone interviews of American Muslims and found they represent “a neglected market with huge potential for brands that are willing to connect with them.”⁴ The report uncovered these points about American Muslims’ attitudes to brands:

• 70% felt that brands play an important role in purchase decisions, compared to 55% for the average American
• 71% said they rarely see anyone of their own faith or ethnicity in advertising
• 73% said they could not think of one mainstream brand that showed a Muslim in its advertising
• 77% rated price as important, as against 91% of the general public, making their brand choice less price sensitive⁵

The group is diverse – American Muslims originate from many different countries, speak many languages, have varying levels of education and socio-economic status and exercise different lifestyle choices.  Yet they are bound by one unifying bond: Islamic identity.

Similarly, the Islamic community in Australia is made up of people from diverse countries of origin, including countries in the Middle East, Asia, Africa, Europe and the Pacific.  However 2011 census data reveals that the majority of Islamic Australians are of Lebanese or Turkish background, as shown in this graph:

It is worth noting that approximately 24,000 (around 5%) of the Muslim population did not state their ancestry in the 2011 Census – perhaps through fear or simply not understanding the question.  This is unlikely to significanctly alter the results in the above graph however.

Predictably, given the diverse ancestry of the group, the Census 2011 data reveals that a diverse range of languages is spoken at home by Islamic Australians.  Middle Eastern Semitic languages (mainly Arabic) are by far the most widely spoken languages at home, with English ranking third, as demonstrated in the following graph:

It would be naive and incorrect to assume that Muslims from such diverse backgrounds can be fragmented along simplistic religious lines.  However it is possible for organisations to align themselves with the shared values of the religion.  Miles Young of Ogilvy & Mather says, “Islam bonds their daily lives and consumption habits through the centricity of faith.”⁶ 

Nazia Hussain, director of cultural strategy, Ogilvy & Mather Global says, “Start with their values – core Islamic values – then build brands around them to appeal to them.  Not the other way around.”  Islam is so pervasive in most Muslims’ lives, that the heterogenous community share the values of their faith, which frequesntly affects their behaviour as consumers.

Research undertaken by Ogilvy and Mather reveals that the dominant Shariah values include ‘honesty, peacefulness, authenticity, patience, discipline, transparency, modesty, community, dignity.  Underpinning the working of Shariah is ‘sincerity of intention’.  Brands that reflect these values in their marketing collateral fare better with the Islamic community.

Understanding the Muslim Market

While the Muslim community can be segmented into some shared characteristics, organisations need to pay attention to what Muslim consumers want and need, and to gain a deep understanding of this complex and diverse community.  Brands cannot merely add the Halal brand to their product and/or use a traditionally-dressed Muslim in their marketing material to successfully chase the Muslim dollar.  El-Fatatry says, “You have to go after people in their own language and think about the consumer’s needs.”⁷

Ogilvy and Mather identified an emerging dominant, influential group of Muslims they term ‘Futurists’⁸.  Futurists are young, individualistic, have considerable spending power and should make marketers sit up and pay attention. Attributes of this group suggest they are:

• Ambitious and seek to integrate a more globalised lifestyle
• Technologically savvy and ‘connected’
• Creative and place great value on education (refer to the education levels chart later in the ‘Market Characteristics’ section)
• Seek out products that promote shared values
• Brand loyal, but hold organisations accountable to their claims
• Family and community oriented
• Proud of their religion, but follow it on their own terms

With more than half of the Islamic population in Australia being under 30⁹it is a large cohort.  The following chart highlights the extent to which the population is very young. When compared with the Australian population as a whole, we can see that there are few older Islamic persons and the vast majority of the population is 39 and under.

This may be partly attributable to the recent influx in migrants from Islamic backgrounds to Australia.  Compared with the overall Australian population, migrants with an Islamic background have migrated much more recently.  In the years 2004-2009 there were almost four-fold the number of Islamic immigrants to non Islamic immigrants.  The demographic mix is consistent with the tendency for migrants to migrate in their younger years.

This recent influx of Islamic migrants may also explain in part another interesting demographic of the Islamic population in Australia – the relative prevalence of males compared with females.  Overall there are just over 9 females for every 10 males in the Islamic Australian population.  Males are more likely to migrate than females, reflecting the greater range of opportunity for Islamic males.

How to Market to the Muslim Consumer

In targeting the Muslim consumer and particularly the ‘Futurist’ Muslim, organisations should consider these six strategies for success.

Align Your Product and Marketing with Islamic Values

It is well known that Muslim consumers will purchase products that meet the values of their faith, namely honesty, peacefulness, authenticity, patience, discipline, transparency, modesty, community, and dignity.  Futurists will test the validity of a product/service/organisation that is branded halal or Muslim “and will embrace those whose values withstand the scrutiny, and will be scathing to those whose promises are found wanting.”¹⁰

Speak to the Muslim Consumer in their Language

Invest resources and energy into truly understanding this diverse, heterogeneous group and how your product meets the needs and wants of the Muslim consumer.  It may be appropriate in many instances to utilise a multi-faceted marketing approach, whereby a different message and marketing collateral is developed to target the various segments of the group.  A one-size-fits-all message is rarely appropriate to the group.  Hussain says, “We tell marketers not to use overtly religious messages.  Most Muslim consumers are very mainstream.  If you target the religious minority, then you will be targeting a niche within a niche.”¹¹

Ensure Your Product or Service is Halal

Without realising, your product or service may already conform to Islamic values.  Or only small changes are needed to make your product or service halal.  If your product or service is halal, taking the small step of having it certified as such may pay big dividends – and not only in the Muslim community.  Many of the values that make products or services halal – such as purity, high-quality, healthy and wholesome, cleanliness, ethics, honesty and transparency – are equally appealing to society in general.  By investing in changing some ingredients or aspects of your product or service, you could receive halal certification and immediately increase your market.  The next step in the process is ensuring that you communicate the halal status of your product or service through packaging and marketing material.

Use Electronic and Social Media Marketing

Futurist Muslims are technologically savvy and not only use online outlets for purchasing products and services, but also for spreading the word about their experience.  Investing in a robust online presence and social media strategy to spread the word may be a wise marketing spend.

Ensure Appropriate Imagery and Messages are Used

Many Muslims have a concern about the sexualisation of Western society.  “A common concern shared by Muslims from various national and cultural backgrounds relates to the discomfort, even shock, with the social and sexual permissiveness of mainstream Australian society.”¹²   Sex doesn’t sell to the Muslim consumer.  Ann Mack, director of trendspotting for advertising agency JWT, says “Muslims are especially turned off by sexual suggestiveness or immodesty.  Use images that aren’t sexually provocative.”¹³ 

The Muslim consumer finds imagery that acknowledges Islam values as appealing.  “Muslims are more interested than most Americans in seeing advertising that acknowledges them”, says Mack.

Support Muslim Communities

Futurists are community and family oriented, as well as technologically savvy, and once they discover a valuable product or service that is Halal and aligns with their values, they are likely to share the discovery amongst family and friends – at the touch of a mouse.  Ogilvy & Mather Global director of cultural strategy Nazia Hussain says: “Muslim communities tend to score highly on Hofstede’s collectivism score, which means they are societies in which word-of-mouth and in-group recommendation and recognition are of enormous importance.”¹⁴

Ramadan provides a perfect opportunity to tap into the Muslim community by supporting the associated events and festivals with Ramadan.  See the later section on ‘Ramadan’ for more information.

Marketing by Product Category

By drilling down further into individual product categories, we can further highlight the strength of the Muslim market and the factors that influence Muslim purchasing behaviour.

We know that halal status is an important influence, particularly in relation to food and drink.  Ogilvy and Mather derived a ranking of the relative importance of Shariah-compliance by product category.  “At the top, food, dairy, beverages and oral care scored the highest.  In the second tier, consumers ranked fashion, personal care and ‘regular’ finance.  In the third tier were airlines, resorts, financial and insurance products.  At the extreme end, Muslim consumers will tend to identify ‘halal/haraam’ (permissible/forbidden) as irrelevant to some categories, for instance, software, or even to imply a halal usage effect that makes it in effect compliant if the ultimate benefit of it usage is positive development for the community.”¹⁵ 

• Food and Beverage
• Tourism and Hospitality
• Banking and Finance
• Cosmetic and Personal Care
• Education
• Entertainment
• Digital Products and Services
• Fashion

Food and Beverage

Dr Paul Temporal, a leading global expert on brand creation, estimates the global halal food market to be worth approximately US$650 billion annually.¹⁶  He says that currently the halal market is largely being served by large, global Western corporations such as Nestlé.  Nestlé is seeing big returns from its halal products, with sales in Europe reaching £33.3m (US$50.7m) in 2008 and a global turnover of £3.2bn (US$4.9bn) in halal products.¹⁷  However, smaller, local operators are taking market share, and are predicted to increase their market share over the coming years.  Muslim-owned manufacturers such as Dubai-based Al Islami are growing fast.¹⁸ 

Tourism and Hospitality

DinarStandard and Crescent Rating estimated the international travel market in 2011 to be worth US$126.1 billion, making up 12.3% of all international travel.  They predict Muslim international tourism to increase by 4.79% per year until at least 2020, a faster rate than average international tourism increases of 3.8% per annum.  By 2020 they predict overall spending for international Muslim tourism to reach US$192billion.¹⁹

Muslim travellers seek holidays that are halal compliant, including halal food and beverages, alcohol-free environments, quiet and family-friendly accommodation, destinations where modesty is assured, allocated prayer time and separation of sexes where appropriate.  Some countries, such as Malaysia, are actively attracting the Muslim consumer by offering halal holidays packages based on Muslim values, and are seeing financial rewards.  The DinarStandard-Crescent Rating study reports that the top three destinations for Muslim travellers are Malaysia, Turkey and the United Arab Emirates.²⁰

Banking and Finance

Halal compliance forbids financial institutions from charging interest, requires ethical and transparent operation, and investment based on Muslim values – for example, no investment in alcohol, weapons, pornography or tobacco.  The corporate reputation of global financial institutions amongst Muslim consumers has led to a perception that they cannot be ethical.  Young says, “Global financial brands in particular suffer from a belief that they cannot, in principle, be Shariah-compliant.   In spite of heavy investment in ethical divisions such as HSBC Amanah, they are contaminated by behaviours in non-Muslim markets.”²¹

The GFC fuelled the lack of trust of international financial institutions and provided more opportunity for Islamic financial institutions to increase market share.  According to Ernst & Young, Islamic finance has increased at a compound annual growth rate of 20% in the last three years, compared to 9% for conventional finance.²²  Islamic finance organisations are viewed as ‘ethical finance’, and are attracting both Muslim and non-Muslim consumers.  “The continued rapid growth of Islamic finance is also partly due to the fact that it is based on principles that are accepted widely by non-Muslim as well as Muslim consumers.”²³  It is anticipated that Islamic finance will continue to grow.  “Islamic finance remains a small percentage of the global financial industry, but fast growth is continuing and there is plenty of room for product innovation.”²⁴

Cosmetic and Personal Care

In order to receive Halal status, cosmetics and personal care items need to ensure they do not contain non-compliant substances such as certain animal-based gelatines, nor be tested on certain animals.  Temporal predicts this market to be a growth area in the global Islamic market, saying, “Some countries such as Malaysia are strategically earmarking companies manufacturing medicines, pharmaceutical and cosmetics products for special assistance in building their businesses and marketing their products.”²⁵

Education

The Islamic population is young.  Temporal predicts that by 2050 Muslims will account for 60% of the world’s population under the age of 18.²⁶  Futurist Muslims are steadfast followers of their religion and its values, and Islam is a large part of their lives.  This will necessitate the continued growth of Islamic educational institutes, whether at Primary, Secondary or Tertiary level, as the Muslim youth population increases.

Entertainment

In the coming years we can expect to see an increase in Islam-specific television channels as the population increases and demand exists for content relating to Muslims.  Recently there have been a number of Islam-focused TV channels, even in Muslim-minority countries, such as Islam Channel UK.  Funded by advertising and donations, Islam Channel UK has been a success.  UK government research in 2008 found that 59% of British Muslims watched the channel.²⁷

Digital Products and Services

Futurist Muslims are tech-savvy and widely use digital products and services – including the internet for online shopping, social media platforms for connecting with one another and sharing their experiences, and for accessing tools that promote Islam and its values.  Many global technology brands have already recognised the value of the Islamic market, and have actively pursued the Muslim consumer through value-added products and services and Muslim-focused marketing.  For example, mobile phone providers have offered free apps containing Muslim-specific content such as showing the direction of Mecca, and prayer time alarms.  Temporal predicts the online and digital sector to grow at a fast rate, saying, “The Internet, media and digital products area provides arguably the most exciting of the opportunities available to those wishing to serve Islamic markets.”²⁸

Fashion

Muslim women have an appetite for modern, attractive and modest fashion.  Shelena Janmohamed of Ogilvy and Mather says that Muslim women increasingly see no conflict between fashion and faith, and are demanding cutting edge fashion offering modest clothing. ²⁹  In fact, a women’s magazine in Turkey exploring the relationship between fashion and religion has become so popular it is outselling Vogue and Elle.  We are starting to see modest fashion innovations emerge, such as the ‘burgini’ swimwear, but there is plenty of potential for further innovations and products.  The Muslim fashion market is estimated to be worth $96bn globally³⁰, yet is currently dominated by online retail and start-up brands.  There is great opportunity for mainstream brands to bring Muslim fashion lines in store, a move that is likely to elicit strong brand loyalty by the Muslim consumer.

Ramadan: Connecting with the Muslim Community

Futurist Muslims are community and family-oriented, and expect organisations to support their community to earn their loyalty.  Ramadan, which in Australia commences this year on Tuesday 9th July and finishes on Thursday 8th August, provides the perfect platform for organisations to demonstrate their commitment to Islamic values and support the Islamic community.  It is also an opportunity for attracting the Muslim consumer.  As Almas Abbasi, a radiologist on Long Island, told The New York Times, “If Ramadan starts, and you see an ad in the newspaper saying, ‘Happy Ramadan, here’s a special in our store,’ everyone will run to that store.”³¹

Ramadan consists of a month of fasting during daylight hours, and is a period of self-reflection, increased worship and commitment to Islam and recitation of the Quran.  The purpose behind Ramadan is for Muslims to better practice self-control, restraint, sacrifice and empathy for those less fortunate.  Muslims are encouraged to participate in voluntary activities and are compelled to donate food or money for charity during the period.

Ramadan concludes with Eid-Ul-Fitr, a celebration consisting of a feast which can last up to three days in some countries.  The most important celebration in the Islamic calendar, its purpose is to give thanks and pray, forgive old wrongs, and give money to the poor.  Celebrations involve preparing special foods to share with friends or relatives, dressing in finest clothes, decorating homes with lanterns, exchanging gifts and greeting cards and giving presents to children.

To tap into the Muslim community during Ramadan, organisations may consider the following marketing strategies:

• Adjusting opening hours to sell food and beverages to Muslim consumers outside daylight hours
• Aligning the company with a charity organisation known to the Muslim community
• Investigate local festivities associated with Ramadan and actively participate in or sponsor the events

The Muslim Community in Australia: Market Characteristics

The Islamic Australian population has grown rapidly in the past decade, with Islamic Australians now making up 2.21% of Australia’s overall population. Almost 80% reside in NSW and Victoria (46% and 32% respectively), with the vast majority in Sydney and Melbourne.

By mapping the Islamic population in Melbourne using the Origins name analysis database, we can see a distinct concentration of Islamic names in the north-western suburbs, namely around Broadmeadows,  Craigieburn, and closer to the city around Coburg.  Secondary concentrations can be found around Keilor, Sunshine, Mill Park, Altona, and to a lesser extent, Doncaster.

In Sydney we see a similar concentration of Islamic Australians.  The incidence of Islamic names is most concentrated in the western suburbs around Parramatta and Bankstown, with secondary concentrations around Rooty Hill,  Liverpool and Rockdale.

Local Government Areas (LGAs) containing the highest number Islamic Australians are shown below:

In percentage terms, the pattern is similar, but the areas of greatest concentration are highlighted.

In support of Ogilvy and Mather’s attributes of ‘Futurist’ Muslims being ambitious and valuing learning education levels amongst Islamic Australians are high – almost a third of the population is currently studying full-time, and a higher proportion of Islamic Australians holds a degree or higher qualification compared with the general Australian population. A significantly higher proportion holds a Postgraduate Degree than the Australian population.

The high proportion of the Islamic Australian population in full-time study is likely to largely explain the relatively low income levels with more than 35% of the population earning less than $400 per week. It also reflects the predominantly young population, likely to be in the early stages of their careers. Relatively low income levels may also be a reflection of the large influx of Islamic immigrants in recent years and establishing a new life in Australia.

As the population matures and the large population of full-time students enters the workforce it is anticipated that the earning potential of Islamic Australians will greatly increase. The next decade will be a time of change and upward mobility for this segment of the population.