As it is estimated that Muslims will represent 26 per cent of the world population by 2030, many industries are monitoring this to see if it will be the next big thing.
Asia Pacific cannot ignore this as 60 per cent of that number will be in this region, with the largest populations expected to be in Pakistan, Indonesia, and India.
This represents a huge opportunity for businesses in the region, including in Malaysia, to target these markets through expansion.
As Muslims make up most of Malaysia's population and businesses are well-versed in meeting the needs of the community, they are well placed to build on their experience and learnings to grow.
At the same time, it is also important for companies to understand the differences within the Muslim community across borders and tailor their approaches.
To help Malaysian businesses capture international opportunities, here are key considerations and tips for expansion success.
As businesses here are aware, there's no such thing as being able to target the entire Muslim market as it is diverse and can differ from country to country.
As such, even though Malaysian businesses are aware of certain nuances, studying the environment will be essential in business expansion planning.
For example, consumer behaviour will differ according to the attitudes relative to hierarchy, modesty and risk-taking. This is what we call the social-cultural environment.
What this means is as Malaysian businesses look to cater or market their products to the new target audience, they will need to carefully consider the use of elements of culture such as art, standards of beauty or wording.
Just like how companies might change their approach based on the nuances of cities in Malaysia, they will need to do the same for other countries too. This is because some cities are strongholds of Islamic conservatism.
For instance, consider the differences in consumption patterns and attention paid to halal certification in cities in Kelantan and Aceh, in Malaysia and Indonesia, compared with Kuala Lumpur and Jakarta, respectively.
Equally important is paying attention to the political-legal environment because the implementation of syariah law will vary according to the school of jurisprudence in that market.
For example, in Malaysia, the Shafie school is dominant. It is also widely followed across Southeast Asia, including in Indonesia, Singapore, Myanmar, Thailand, and the Philippines, as well as outside of the region in India.
In Saudi Arabia and Qatar, on the other hand, the majority mostly follow the Hambali school.
What this means for businesses is that as a result of the syariah law that is followed, some products and services offered in Malaysia, such as halal water or halal coconut, will not be offered elsewhere, like in Saudi Arabia.
While there are differences across the Islamic communities, there are similarities that can be leveraged during expansion too. Because of the alignment between Malaysia and other Muslim communities across Southeast Asia, such as the dominance of the Shafie school, Malaysian businesses looking to expand overseas would be wise to look at targeting their neighbours first as they can leverage their learnings and experience from success locally.
It is also important to monitor what in-market local companies are doing to see where there might be synergies for partnership, as well as where there might be niche opportunities to offer something unique and different.
For example, Malaysia is a leader in halal food and so is Indonesia. Another country looking to make a name for itself in the halal food space is Thailand, so there's an opportunity for Malaysian food manufactures and producers to explore the Thai market to support it with this vision.
While Covid-19 has hit all countries and industries, businesses should be thinking about their road to recovery. Malaysian companies can look at how to expand and target consumers beyond their borders to help them grow and thrive in the new normal.
When doing so, it is important to remember the differences within the community and understand the socio-cultural and political-legal environments of their target audience to truly be successful.
The writer is ESSEC Professor of Geopolitics and Islamic Business and Director of the ESSEC & Mannheim Executive MBA Asia Pacific