This is how Muslim entrepreneurs are tapping into the $2 trillion halal economy

• Muslim consumers are ready to spend trillions on services that cater to their beliefs.
• Services tailored to the "halal" economy include everything from dating apps to modest fashion.

Entrepreneurs are tapping into the growing Muslim demand for apps, fashion, and other services - with the community's spending power already estimated to be in the trillions.

Muslim consumers spent more than $2 trillion globally in 2019, indicated research by the State of the Global Islamic Economy Report 2020/2021.

This ecosystem is sometimes referred to as the "halal economy," defined by "Generation M" author Shelina Janmohamed as "the appetite that Muslim consumers have to consume products and services."

The word "halal" refers to products that are permissible to consume within the margins of Islamic law.

The objective for Muslims is toward "completing the identity in every aspect of life," said professor Mehmet Asutay, an expert on Islamic finance at Durham University.

Young Muslims are driving the halal economy, particularly after the events of 9/11. Janmohamed said the tragedy and subsequent discrimination motivated young Muslims to "define themselves by their very overt, explicit Muslim identity."

She added: "They want to feel part of the consumer generation. They want to have products and services that meet their requirements. When they go on the high street, they don't find those products and services. So they start to develop them themselves."

'Mainstream dating apps don't work'

One example is Muzmatch, the first Muslim-centric app to be backed by Silicon Valley's Y Combinator accelerator program.

The app - launched in 2015 by founder Shahzad Younas - said it has 4.6 million members, helped by a 45% increase in downloads since lockdowns began in 2020.

Younas said he sought to provide a service that appealed to a sophisticated Muslim consumer. He added that across South Asia and other parts of the world, "there is a growing middle class" that has an appetite for Muslim-oriented products.

"If you identify as Muslim, we're a place for you," he said, adding that the service initially focused on Muslims in non-Muslim countries.

"In Western countries, the mainstream dating apps don't work for Muslims," Younas said. "They're too casual. They're not centered around finding a life partner. They don't really cater on a religious or ethical perspective of what we think is acceptable and what's not for the Muslim consumer."

It's partly about changing priorities

One reason Muslim consumers are clamoring for tailored services is the changing priorities between generations.

Asutay said, for example, that demand for companies providing Islamic finance is higher in the UK among the younger generation.

The first generation was "the homemakers," he said. "Their objective was very much looking into the well-being of their kids; having an accommodation, house; and building the mosque."

The younger generation, moving up a Maslow-style hierarchy of needs, "are more Islamic-finance-oriented or inclined to take care of Islamic finance compared to the earlier generation," he said.

Startups such as Wahed Invest or Affinis Labs - both founded in 2015 - aim to fill this gap. Wahed Invest is a halal investment platform, and Affinis Lab is a social-innovation firm that helps clients tackle global challenges.

Janmohamed, who also runs Ogilvy Noor, a consultancy for building Muslim consumer brands, said bigger brands had a sense of missing out on Muslim consumers.

British retailer John Lewis began stocking modest-fashion retailer Aab earlier in 2021, while Nike catered to Muslim swimmers with modest swimwear in 2020. Muslim spend on apparel is expected to reach $311 billion by 2024, and Muslim women, in particular, seek modest clothing.

Janmohamed said: "The Muslim women who are so often depicted as stereotypes in our newspapers, in our political discussions, as kind of oppressive, oppressed and weak, and victims have created an industry that is worth hundreds of billions of dollars, and it looks kind of cool, and it's very stylish."

Asutay concluded that bigger brands representing the needs of the Muslim consumer "is an important opportunity in terms of getting the Muslim community to move on and to become part of the larger society."