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
"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
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
"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
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,
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.