The Muslim beauty and personal care market is expanding meteorically. However, few multinationals have managed to penetrate this segment and are continually foiled by niche or smaller home-grown players.
A rapidly growing sector
The strong demand for halal beauty and personal care products is being fuelled by a growing number of Muslim women keen to combine religious observance and fashion trends, as well as by Muslim consumers entering the ranks of the urban middle class.
Yusuf Hatia, head of FleishmanHillard’s Majilis practice group that targets opportunities related to the Muslim consumer, believes that greater product and ingredient awareness, with consumers choosing products cognisant of their values, as well as heightened sharing on social media are other key factors stimulating the growth in the halal beauty and personal care category.
According to the Future Market Insights (FMI) September 2015 report, Southeast Asia is the most lucrative region in Asia Pacific for halal cosmetic products with South Asia alone valued at US$342.9 million in 2014. FMI forecasts that this category can expect a compound annual growth rate (CAGR) of 9.9 percent during 2015–2020. Indonesia and India are the two biggest Muslim cosmetics markets in Asia Pacific in terms of value.
The massive potential of Muslim consumers has long been recognised by Western multinationals, many of whom have gone all out to anchor themselves in this flourishing segment. Unilever, for example, launched a Sunsilk shampoo television commercial in Malaysia in 2010 with a woman in a tudung or headdress after company research showed that women who don such headgear often complain about oily scalps.
Multinationals are facing keen competition from local players
Multinationals are facing competition from astute local players who have intimate knowledge of Muslim consumers in their respective markets. Market leaders in the Asia Pacific halal beauty and personal care market include Martha Tilaar (Indonesia), INIKA (Australia), Clara International (Malaysia), WIPRO UNZA (Malaysia) and Paragon Technology & Innovation (PTI) (Indonesia).
This seems to indicate some preference for products produced by local manufacturers, but Hatia explains that this is not always the case. “Indeed, some consumer studies indicate that Muslim consumers prefer global brands over local ones, but the key consideration is halal first for those who are consciously looking for religiously compliant products,” he says.
Go hyper-local and project authenticity
The Muslim consumer market in Asia is a heterogeneous segment comprising myriad social-cultural sub-groups speaking different languages and adhering to varying standards of dress and customs. There is thus an added layer of complexity when it comes to engaging Muslim consumers in the region. Seemingly, in order to gain a foothold in the Muslim beauty space, it is crucial for companies to develop hyper-local marketing strategies attuned to the cultural nuances and individual lifestyles of each market.
In addition to adopting marketing strategies aligned to local needs and cultural differences, it is imperative that companies devise communication strategies that reassure Muslim consumers of a product’s authenticity. According to Hatia, research carried out by FleishmanHillard Majlis highlights that the Muslim consumer is not always aware that some global brands may be halal compliant. “Multinationals don’t always advertise or communicate this and it is often left to consumers to investigate and share this information themselves,” he stated.
To certify or not to certify?
Increasing awareness of the use of porcine-based ingredients in cosmetics – which is forbidden in Islam – is fuelling a dramatic shift towards halal-certified products. For instance, the use of swine placenta in cosmetics, including wrinkle creams and facemasks, is becoming a major issue among Muslim consumers. The halal label therefore appeals to Muslim consumers who are keen to avoid beauty products containing animal-derived ingredients that are fundamentally discouraged by Islam.
Hatia says, “When a consumer buys a product claiming to be organic, he/she wants a guarantee that the product has organic ingredients and a Muslim consumer, making the conscious decision to buy a halal product, wants the same level of assurance. Halal certification assures consumers that they are using a product that has gone through a process to validate that status.”
Then again, there is no single body governing the certification of halal products globally, with each country adopting different criteria. This is being gradually addressed. For example, since 2009, Malaysia and Turkey have jointly established halal standards for Organisation of Islamic Conference (OIC) countries. Malaysia is also lobbying for a regional standard for halal certification as part of the integration process for the Association of South East Asian Nation (ASEAN) Economic Community.
Knowledge is power
Targeting the Muslim personal care and beauty market demands a unique set of capabilities that is not always inherently built into a company’s systems and processes.
According to Hatia, companies need to cultivate a genuine understanding of Muslim consumers in spite of limited market data to succeed in this burgeoning sector. “On top of this, companies must come to grips with using the language and terms associated with halal products, have clear brand messaging and dedicate their resources to innovate in this category, while anticipating the challenges and potential issues associated with developing and marketing halal products,” he adds.
Edited by Kritika Srinivasan, Gracia Chang and Jocelyn Lim. As originally published on Future Ready Singapore.