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The Indian Muslim market population is 151 million strong. DinarStandard estimates their total annual household income of $48 billion (Avg. Household Income x Avg. Household size x Population).
It also boasts the highest level of household goods expenditure compared to any other religious segment in India (at 69% of income according to Survey of Household Income and Expenditure (2004-05.)
For any marketer, this has to be an attractive market demanding exclusive focus.
While all categories of common household goods and services would apply to this market, a segment of offerings that uniquely cater to Muslim needs provides tremendous potential. |
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This global category, termed as the Muslim Lifestyle Market™ by DinarStandard , covers services such as halal food, Islamic finance, muslim clothing, muslim media, educational institutions, travel services, and more.
Many Indian Muslim Lifestyle Market™ offerings exist today--some of which are sampled below. However, there is also evidence of a huge gap between the fragmented options currently available and the opportunity for national and regional brands to be built to serve this seemingly vast need.
Islamic Finance:
Islamic Finance is today a global phenomenon with institutions operating in over 75 countries whose assets are estimated at more than US$265 billion. The average annual growth of the industry is estimated between 10 and 20% (according to the International Islamic Finance Forum.)
In India, major attempts have been made to comply with Muslim financing options based on interest free, socially sensitive financing and other Islamic financing conjunctions.
Dr Shariq Nisar who writes regularly on Islamic Finance in India has chronicled much of these efforts on his blogpost, “Challenges for Islamic Banking in India.” First, he talks about the existence since the 1930s of Trusts which Muslims adapted as ‘Muslim Funds’ which still exist to this day. These however are non-profit institutions. It wasn’t until the early 1980s that for-profit Islamic finance options began to appear. However, many of the efforts have failed either due to Indian statutory hurdles or due to a lack of professional management.
Muhammad Hussain Khatkhatay, was the Managing Director of India’s once largest Islamic Financial Institution, the Barkat Investment Group which had been highly successful in India in 1980s and till mid 1990s. However, the business went south and was liquidated in May 2000 due to a variety of reasons including a recession in the real estate market (in which they had heavy exposure), poor management and statutory hurdles.
Indian banking laws make Islamic banking almost unviable as they limit banks to accepting deposits from the public for further lending. Also they prohibit banks from investing on a profit and loss sharing (PLS) basis. However Dr. Nisar points out some major opportunities.
First, India’s financial system also comprises Non-banking Financial Companies (NBFCs), Mutual Funds, Insurance Companies and Developmental Institutions. The mutual funds, venture capital and a number of likely instruments based on equity financing are considered to be identical to Islamic principles of profit and loss sharing. Some efforts in this regard are underway.
Examples are:
- Idafa.com: Shariah compliant stocks investment firm. http://www.idafa.com/
- IslamicEquicty.co.in run by Parsoli Corporation, facilitating Islamic wealth management http://islamicequity.co.in/
An additional opportunity is the entry of foreign Islamic banks in the country either through the capital markets or through joint venture partnerships with Indian counterparts.
These are serious opportunities given the large market size. Dr. Nisar estimates that there are over Indian Rs. 40 billion of funds to invest by Indian Muslims annually. Add to that, the need for business financing in a community which boasts 50% self-employment and, as pointed out in the Sachar Report, has very few avenues for financing and loans, which in-turn affects there ability to compete and grow.
Media
Media that caters to the specific needs of Muslims in India is perhaps the most mature of the Muslim Lifestyle Market offerings in India. However given the fast moving changes in the media industry, opportunities still abound.
Indian Muslim media is shaped by the most popular language amongst Muslims - Urdu. According to the Indian Audit Bureau of Circulation, Urdu enjoys the third highest number of publications. Some examples of these publications are Roz Name Salar (by Al Amin Group); Munsif; Inquilab (popular in Bombay), Zindagi e Nao; Tehqiqate Islami. Also, a few online publications are also catering to the needs of the Indian Muslim Diaspora --such as The Milli Gazette, and Indian Muslims.info
There is also a whole segment of religious media. On the broadcast side, ETV Urdu from Hyderabad is a popular channel as well as Q(Quran) TV which is broadcasted from Pakistan.
New Delhi based Goodword Books Pvt. Ltd. Produces Islamic cultural children games and books that are marketed globally. (http://www.goodwordbooks.com/index.php)
In addition there are various Islamic literature publishing houses. Some of these are: Markaza Maktaba Islami Publishers: mipublishers.net; publishing wing of Jamaat-e-islami; Farid Book Depot : Urdu publisher; and Idara Ishaat-e-Diniyat. Educational Institutions
While Muslims participate in mainstream Indian education institutions and aspire to attend its premium institutes such as the IITs, there are many institutions administered by Muslims which provide generic education based on Indian curricula as well as Muslim specific courses.
While the Aligarh Muslim University was a beacon of education for Indian Muslims it has lost its glory while other institutions have gained prominence. Jamia Millia Islamia based in Delhi (http://jmi.nic.in/) is a well recognized liberal arts and media studies institute with around 11000 students. The University’s students, faculty and administration are mostly Muslim. In early 2006, the King of Saudi Arabia paid a historic visit to the University and donated a record $30 million for construction of a new library.
Other key Muslim institutes across the north include:
• Crescent Ed Society (Chennai)
• Madraessae Azam
• Calcutta Madrassa College
• Saboo Sadiqui (Eng. Colleges)
• Rafiq Zakaria (Aurangabad)
• Hamdarad Univ in Delhi
• Al Amin, (Big Karnatuka Med Colleges/ eng. Colleges)
• Aligarh Muslim (Serving mostly Muslims of Eastern UP) Key Muslim institutes across the south include:
• Ansar Charitable Trust (a premium education institute having a number of education institutions ranging from kinderschools to post graduate colleges – all in huge campus).
• MES (Muslim Education Society), has a large number of educational institutions across Kerala.
• Islamic University in Shanthapuram
• SMART, a relatively new institution, and one of its kind among Muslims. SMART is a muslim version of Verkey’s GEMS (Global Education Management Solutions). SMART is an educational institutions management, operations and consulting firm. Their first project is called ‘ Knowledge Corridor’ in Calicut Other areas
Many other categories of products and services catering to the unique Muslim needs exist. For example, availability of Halal food (Muslim dietary requirements) is a huge segment which is today informally served in India. No formidable Halal standardization/certification body exist. Much of this is done through the approval of local Imams while Muslim dietary sensitivities are recognized in restaurants/ stores across India.
Another category is modest/ Muslim clothing which is also very much an informal industry in India and is more influenced by regional cultures.
Other Muslim services represented as small operations include Muslim travel services, legal advisory services (Wills/Trusts), matrimonial services, event management and more. All of these are yet to be tapped into with national or regional operations, brands and efficiency.
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