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Muslims Flexing Their Economic Muscles More Often, More Creatively

By Andrew Chang
25 June 2002


The struggle to win the hearts and minds of Muslims around world has been on the lips of Westerners a lot lately, but there's a parallel battle that has been fought for a long time: the one for its pocketbooks.

The influence of the Muslim consumer is felt in nearly every nation around the globe: multinationals like Pizza Hut have established bases in Yemen and Pakistan, while Halal butcher shops, which serve meat that has been prepared according to the standards of Islamic law, are found throughout the world.
The purchasing power of U.S. Muslims alone is $12 billion yearly, according to the New York-based Center for American Muslim Research and Information.

"There are six to eight million Muslims in the United States," Rasheed Ahmed, with the non-profit Muslim Consumer Group, told ABCNEWS. "There is a lot of potential there."

There is some disagreement over the U.S. Muslim population — others put the figure at 2 million — but considering Islam is the world's second-most popular religion, with some 1.2 billion adherents, the potential profit for those marketing to the Islamic world is huge, including for American firms.

But experts warn that there are also considerable obstacles for those interested in marketing to Muslims.

American companies appealing to overseas Muslims have to contend with growing resentment among their target audience.

Some Muslims believe American firms already dominate too much of the market, while others have chosen to forego American goods in response to Washington's perceived anti-Islamic actions in the wake of the Sept. 11 attacks or the United States' association with Israel.

The plight of the Palestinians is one of the foremost concerns among Muslims of all kinds, from Shiites to Sunni, from Gulf Arabs to Southeast Asians, said Rayed Tayeh, of American Muslims for Global Peace and Justice.

Bring in the Replacements

For some Muslim-run companies, that resentment has helped expand their markets.

Zamzam Cola, an Iranian soft drink that was invented as a replacement for U.S. soft drinks after Iran's 1979 Islamic revolution, recently hit the shelves in Bahrain in response to growing anti-U.S. sentiment.

Bahrain, an official American ally and home to the U.S. Navy's Fifth Fleet, is considered one of the most liberal and wealthy countries in the Persian Gulf. However, it is also a Muslim country whose citizens have been boycotting American goods to express their frustration at U.S. policy on the Israeli-Palestinian conflict.

"There's a growing demand for substitutes to American soft drinks, which is what prompted us to import Zamzam Cola," an executive at the Bahraini-owned Zamzam Soft Drink Drops told the Middle East Times.

Coca-Cola has also long been a subject of debate among Muslim religious authorities, because it is made from a secret formula, which may include traces of forbidden ingredients like alcohol. Muslims are forbidden to use alcohol.

Zamzam Cola, named after a spring in Mecca that Muslims consider sacred, has not been subject to such debate — mainly because Zamzam is a product of Iran's Islamic government.

Concern about un-Islamic influences has also prompted toy-makers in Iran to create a more appropriate replacement to American icons Barbie and Ken.

Government officials have accused the buxom, blonde Barbie of sneaking in Western influences with make-up and revealing clothes and violating traditional Iranian values. Earlier this year officials launched a campaign to confiscate all U.S.-made Barbie dolls in the country.

In Barbie's place, Iranian children have been offered Dara and Sara, a set of boy and girl twins who come with modest clothing and cannot be undressed. They come with accessories like calendars, posters, and headscarves, as well as stories on cassette promoting their pro-family backgrounds.

Experts say Muslim consumers are becoming increasingly aware of the power of their pocketbooks, and anti-American sentiment is boosting sales of not only Islamic goods, but European and Asian goods.

"The market is very open in the Middle East. People see that they have the freedom and choice to choose from a variety of products [from all over the world]," said Nihad Awad, executive director of the Council on American Islamic Relations.

Awad said he's heard of European appliances and Japanese cars getting a boost. Muslims are also choosing to avoid U.S.-made pharmaceuticals. Hospital and dispensaries run by Palestinian militant group Hezbollah reportedly even have a complete list of alternative medicines produced in Arab, European or other countries.

Customer Knows Best

Other products have capitalized on the Muslim market not so much by rejecting the West as by appealing to the Muslim consumer.

Bankers have discovered an emerging market for Islamic financial products, which invest according to Muslim values, or according to the Koran's Shari'ah law, which prohibits lending money for interest.

According to the Financial Times, this market is estimated to be worth at least $150 billion a year and is growing at 10 percent to 15 percent annually. HSBC Investment Bank has created a Global Islamic Finance Department.

Youshaa Patel, a representative for the Dow Jones Islamic Index, says his mutual fund invests in "no alcohol, no tobacco, no pornography, no weapons."

"We definitely see an interest," he said. "Generally speaking, we see a growing market overall."

Meanwhile, in Egypt this year, junk-food merchants have found a way to add value to their products by associating themselves with the Palestinian cause.

Earlier this year, as tensions in next-door Israel heated up, Egyptian storekeepers started stocking snack chips with names like "Abu Ammar" and "Hero."

"Abu Ammar" is named after Palestinian leader Yasser Arafat's nom du guerre, and comes bagged in the colors of the Palestinian flag — red, green, and black — with a picture of Arafat himself.

"The Hero" is bagged with an image of a schoolboy holding a stone in his right hand and books in the other as he confronts an Israeli tank.

The manufacturer of "Abu Ammar" promises to donate a portion of all proceeds to support the "Palestinian cause."

Every Man For Himself

Even if companies have no interest in the Muslim market, they are finding it harder to avoid its influence.

Muslim groups are currently boycotting as many as two-dozen multinational companies, such as Sara Lee, for alleged pro-Israeli bias. Sara Lee said it had not seen any impact from the boycott.

Muslim groups have recently been concentrating their fury on coffee chain Starbucks, accusing its chief executive, Howard Shultz, of being "an active Zionist" and a "propagandist for Israel."

Starbucks, which has retail locations in Muslim countries including Lebanon, Oman and Malaysia, has been trying to refute these allegations. Shultz said in a statement: "My position has always been pro-peace and for the two nations to co-exist peacefully. I am deeply saddened by the current events in the Middle East."

Amid increased anti-American sentiment in the Middle East, local franchisers have found novel ways to show their allegiance to their community and not the home office.

In Saudi Arabia, some McDonald's license-holders promise to give 25 cents earned on every sandwich to the Al Quds Intifada Fund, which supports Palestinian children's hospitals treating casualties of the uprising.

And in Egypt last year, local McDonald's franchise holders faced with a devastating boycott responded by hiring the singer whose song "I Hate Israel" was adopted by the boycotters, to perform the jingle for its new McFalafel sandwich.

Seduction of the Best

The 19-country Arab League boycotted Israel and international firms that dealt with Israel for more than 40 years, until it ended amid peace overtures in the 1990s.

However, even Arabs admit the boycott had little effect — mainly because Arab countries bought few of Israel's exports in the first place.

And Tayef admits that boycotts are no easier today.

As an example, he points to the two of the most popular cars in the Middle East today. Chevy Caprices and Suburbans are popular because because they're huge, bold, roomy and have a luxury appeal, he said.

The U.S exports around $20 billion to the Middle East annually.

"American firms have had much success in the region, there's the idea that American products are the best," he said.