Bernardo Vizcaino
FROM travel guides to shopping portals, new internet ventures aim to capitalise on the growing “Muslim lifestyle” market, which is expanding beyond food to include areas such as tourism, fashion and credit cards.
Excluding food, where “halaal” dietary restrictions must be followed, most of the world’s 1.6 billion Muslims are content to buy the bulk of their goods and services from conventional suppliers.
A growing minority, however, want to certify more areas of their consumption as religiously permissible – a trend that appears partly due to rising incomes in majority-Muslim areas of the Gulf and south-east Asia, as well as to expanding choices for consumers.
Opportunities
In some ways, the trend resembles the surge of consumption of luxury goods in emerging markets, as newly affluent consumers seek to express their identities partly through what they buy.
The Muslim lifestyle market is spread across the world, so some firms are trying to cast a wider net by going online. One is Singapore-based CrescentRating, a firm that focuses on the halaal travel market.
“This is a very fragmented industry of largely offline transactions, with no real major players. It is in a prime position for disruption from an entrepreneurial point of view,” chief executive Fazal Bahardeen said.
Travel is one area of opportunity; Muslim consumers spent an estimated $140 billion (R2 trillion at yesterday’s rate) on travel and tourism in 2013, according to DinarStandard, a research firm specialising in Muslim markets.
Nobody knows how much of that spending was self-consciously “Islamic”. But even if 1 percent of spending went towards halaal products and services, that was a sizeable amount.
CrescentRating has developed a travel index with Mastercard that ranks “Muslim-friendly” holiday destinations and is releasing a mobile application for its travel portal, HalalTrip.com. Its criteria include access to halaal food and places of worship, and the option of having no alcohol in hotel rooms’ minibars.
This month, MasterCard would roll out its first halaal benefits platform, allowing customers to redeem points to obtain halaal products, said Safdar Khan, the group head of Islamic payments for south-east Asia at MasterCard.
In June, MasterCard launched a sharia-compliant debit card with Malaysia’s Lembaga Tabung Haji, a body that manages funds for Muslims to perform their pilgrimages to Mecca. In the same month, it had launched an Islamic credit card with Malaysia’s Maybank Islamic, Khan added.
The Maybank card does not use interest rates, which are forbidden in Islam. It is based on the Islamic concept of ujra, or fee on service, in which bills are subject to additional management charges if the amounts have not been settled in full by the due date.
Convergence
“There is a convergence of factors in Muslim-majority countries: rising per capita income, internet penetration, mobile and mobile commerce,” chief executive Rushdi Siddiqui, a former head of Islamic finance at Thomson Reuters, said. “These were the same attributes in China that made Alibaba take off.”
His firm plans initially to seek business from 16 countries including Turkey and the United Arab Emirates.
Obstacles to such projects include a lack of consensus on what is halaal, and the costs of hiring scholars to certify things as halaal. But the emergence of regional trading hubs in halaal goods and mutual recognition of standards were reducing ambiguity, Siddiqui said. – Reuters