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Ramadan and Consumers: 2012 Trends

July 19th, 2012

Customs revolving around consumption during the Ramadan holidays are changing, not just in Middle Eastern countries, but in Muslim communities around the world. Although a strong contingent of Muslims live in Asian countries, Muslims live throughout the world. As an example, more Muslims live in Germany than in Lebanon, and more live in China than in Syria.

Commercial opportunities

  • More and more non-Muslim companies are including Muslim religious requirements in their marketing. With Muslim populations growing at a rate of 1.8% every year according to muslimpopulation.com, this makes excellent commercial sense.
  • For Muslims, purchasing decisions are based on products corresponding with their beliefs. Tailoring products to consumers of Muslim faith could open up vast consumer opportunities.
  • Ogilvy & Mather recently established a new arm, Ogilvy Noor (Noor means “light” in Arabic) which the company describes as “the world’s first bespoke Islamic branding practice.”
  • While there is much scope for using Ramadan as a commercial opportunity similar to Christmas, brands need to tread carefully in order not to offend some believers.

Background

Despite a world of economic differences between Muslims in Pakistan and Qatar, Somalia and Indonesia, the Muslim world is united in celebrating the 30 days of Ramadan. Abstinence during Ramadan is a religious requirement from dawn to dusk; in the evenings families and friends come together for “Iftar”, where a vast array of delicacies are served to break the fast. This makes food the main – and most affordable – personal indulgence for Muslims. Other pleasures enjoyed in different countries, as shown by German magazine “Stern, include a funfair in Libya, celebrations in New Delhi’s Feroz Shah Kotla cricket stadium and men getting their beauty treatments, including face masks, in a Baghdad barber shop. Somali refugees in Nairobi are celebrating in a market place with a small boy showing off his new suit and tie. In Jakarta a clown parades through narrow streets and in Dhaka the trains are completely overcrowded with people going home to their villages.

Fasting and feasting

In Turkey, Ramazan (the festival’s Turkish name) is also a time of celebration, and after sunset the feasting begins with a ceremonial “break-fast” light meal called Iftar, with strings of coloured lights on trees and buildings and a carnival atmosphere on the streets. During the night drummers circulate through towns and villages to wake sleepers so they can prepare Sahur, the big early-morning meal to be eaten before the fast begins again at sunrise. Many restaurants offer special banquet-like Ramazan menus at night.

Ramadan benefits non-Muslim countries

Ramadan is a lucrative time of the year not just for Arab and Asian companies. The UK’s Tesco supermarket, for example, specifically targets Muslims at this time of the year with its “World Foods” product line. In catchment areas with a sizable Muslim population their stores carry well-laden “Ramadan” aisles. According to a 2011 article in “Marketing Daily”, an estimated eight million Americans observe Ramadan every year. According to a May 2012 post on muslimadnetwork.com/blog, “two-thirds of Muslim households make more than $50,000 a year and a quarter earn over $100,000. The national average is $42,000.”

In July 2011, US-based Halal foods brand, Saffron Road partnered with US supermarket chain Whole Foods Market on various promotional competitions and online media campaigns. The initiative took place during Ramadan, and Saffron Road created blog posts for the supermarket’s site, and ran competitions giving shoppers the chance to win Whole Foods Market gift cards, as well as own-brand Halal products. According to Saffron Road, sales surged 300% during Ramadan while its fan base on Facebook increased by 200%.

Food prices frozen for Ramadan

In the UAE, prices of 1,650 basic commodities have been frozen until the end of 2012 after the Consumer Protection Department (CPD) reached an agreement with 320 retailers, according to a statement from the Ministry of Economy. This initiative is party aimed at limiting the price inflation that usually occurs during Ramadan. According to economist No’man Ashour, consumption by Muslim families increases by 20-30% during Ramadan, and this has forced the government to act. “There should be an awareness campaign to educate customers against price manipulation and the hoarding of food during Ramadan,” he added. He also advised customers against making irrational purchases while fasting.

Gold rush time

In London, luxury shops are bracing themselves for what Bloomberg’s call the “Harrods Haji”, an invasion of extremely wealthy Arab shoppers in the run-up to Ramadan. The “Daily Mail” reports Bond Street jewellers, West End designer outlets, casinos such as Les Ambassedeurs, restaurants such as Le Caprice, and hotels such as The Sheraton Park Tower instructing their (Arabic-speaking) staff to roll out the red carpet. Some five-star hotels are reporting 80% Middle Eastern occupancy, with the pre-Ramadan spending spree boosting the profits of high-end stores such as Selfridges and Harrods, with the average Saudi shopper spending £1,900 – double that for the month before Ramadan. Saudi visitors are reported to be up 22% year-on-year, while visitors from the UAE have risen to almost 120,000 — up nearly 10%. “It’s worth millions to us — last year there was about £120million spent in the pre-Ramadan rush”, says Jace Tyrrell of the New West End Company, the management company for retailers in Oxford Street, Bond Street and Regent Street.

Luxury Goods, Market Sizes in selected countries 2005-2010

3

Source: Euromonitor from trade sources/national statistics

Consumption goes up for Saudis

The Saudi economy benefits from a yearly pattern according to which consumer expenditure peaks during the Islamic month of Ramadan. The young population, increasingly Westernised and brand conscious, is prepared to spend on international labels thus boosting the growing mall culture in the Kingdom. Since 2009, the Holy month of Ramadan and Eid ul Fitr, the holiday marking the end of Ramadan, have been coinciding with summer, so the Ministry of Education has combined the two vacations. Middle-income groups increasingly take domestic vacations, boosting the demand for hotels and furnished apartments. Furthermore, with hajj pilgrims nearing 104 million and increasing pilgrim traffic into the Saudi Kingdom, expenditure on hotels was 14% of total income.

New gadgets for Ramadan

In Indonesia it has become something of a tradition for consumers to upgrade their mobile phones during the Ramadan and Eid religious celebrations. For most, having the latest mobile phone not only signifies a new “beginning” but also brings prestige in the eyes of family and friends when they return home for a visit. For rural migrants, having a new mobile phone can be seen as an indication that they have been successful in the big city. Naturally, major brands time their promotions to cash in on these festivals.

Olympic Ramadan

For the first time, the Olympics (from the 27th of July to the 12th of August) are taking place during Ramadan, and in a spirit of collaboration and friendship, mosques across the UK are opening their Iftar celebrations to neighbours, visitors, Muslims, non-Muslims, officials and Olympic athletes from across the world. Iftar, the evening meal that breaks the Muslim fast during the holy month of Ramadan, is a time of celebration that traditionally includes the hosting of guests and travellers. The Iftar 2012 team is working with the London Olympic committee, UK Government Departments, the Metropolitan Police, Islamic Relief, Scouts Association, Muslim Scouts fellowship, the Islam Channel and some of the biggest mosques in the country to extend a welcome to all visitors and to make the Iftar 2012 campaign safe, special and spiritual. All events are publicised on the iftar2012.com website, as well as on Twitter and Facebook.

Outlook

On a global scale, the commercial potential of Ramadan appears to be growing to approximate Christmas. Like Christmas, a religious context serves as a reason for families and friends to come together at Ramadan, presents are given and special food is eaten. Despite a vast cultural variety in the Muslim world, a typical “Ramadan consumer” is likely to emerge in the same way as the “Christmas shopper” as a global phenomenon.

 

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