DIGITAL ISLAMIC ECONOMY

There is a rapid digital transformation in the global economy. Intelligent digital networks are created, and transformation is formulated with new distribution channels, price strategies, target audience and marketing strategies. With the development of the digital economy, it is expected that the increase in local production and a decrease in the cost of entrepreneurship especially, in the USA and China. Those who benefit from the global digital platform will undoubtedly be digital producers and consumers. Islamic economy has made significant progress in the global economy. The contribution of Islamic economy to GDP has increasingly rising. Islamic economy is also one of the important areas where digital transformation and new creations are realized. There is a strong demand for the production and consumption of products and services in accordance with Islamic traditions. The sectors such as halal food and halal travel, which have been established in the traditional field, have moved to online platforms with digital. Companies that offer the Islamic products and services that are the first to take advantage of the virtual world have started to be the pioneers of the global world.

The Muslim community represents 23% of the total world population with a population of 1.7 billion. With a growth rate of 1.5% per annum, the population is expected to exceed 2.2 billion people by 2030 (Pew Forum, 2011). More than 80% of Muslims are concentrated in Asia, the Middle East and Africa. In this respect, Asia, the Middle East and Africa region are the most attractive Islamic market regions where Muslim consumers are concentrated. They are also the regions with the fastest growth potential. The Muslim community has a young population structure and the average age is 23 years (Deloitte, 2015). A young population structure is prone to technology literacy. In this respect, They are candidates to be the pioneer of the new digital Islamic services and initiatives. The spoken language is important for the development of a country and its integration with the outside world. Although the local languages ​​of the Muslim community differ according to the region, their second language is English. This eliminates the need to provide digital services in their own language. They also integrate quickly with the outside world.

The digital economy shows a rapid growth in recent years. The digital economy, which reached a volume of $ 1.8 trillion as of 2014, is expected to reach $ 4.3 trillion in 2020. While the value of the digital Islamic economy was 107.2 billion dollars in 2014, it is expected to reach 277 billion dollars in 2020 (DIEDC, Thomson Reuters and DinarStandard, Digital İslamic Economy, 2015). It is estimated that an average of 55 billion dollar halal market in Turkey. The value of digital Islamic economics in Turkey in 2014 was estimated at 8.6 billion dollars. Turkey is the largest Muslim market in e-commerce. Other rapidly developing regions of the Islamic market are the United States, Egypt, Malaysia and China. In Germany and France, the Islamic economy is also developing rapidly.

The Islamic economy develops itself in many sectors. The leading sectors are clothing, media, education, food, tourism and finance. According to the number of traffic they receive, the world’s largest digital Islamic website is modanisa.com, the leader of conservative clothing. Established in 2011 in Istanbul, Modanisa has users in 130 countries. It serves Muslim consumers with 500 brands and 70 thousand different products. Modanisa is followed by Muslima from the media sector and Sefamerve from the clothing sector. Starting in 2012, e-commerce Sefamerve is one of Turkey’s fastest growing online sites. It has grown 16 times over a year to become a sales company in 47 different countries. Both Sefamerve and Modanisa use digital applications and social media widely. The most preferred sector of digital Islamic economy has been the media sector. There are 15 Islamic media sites within the first 25 sites. Clothing industry takes the second place among digital Islamic websites. The site with the most traffic in the education sector is Islamic Online University. Bayyinah.com and islamicbookstore.com are among the pioneers in the education sector. The halal food sector is another sector preferred by the Islamic economy. Zabiha Halal and Fauzia’s Kitchen Fun are among the most traffic sites. Irhal is one of the pioneers of the halal travel / tourism sector (DIEDC, Thomson Reuters and Dinar Standard, Digital Islamic Economy, 2015).

Islamic Finance tries to expand its product range by offering alternative opportunities to Islamic finance investors. There are over 38 million Islamic banking customers worldwide. As of 2013, it was estimated that the asset size of Islamic banking exceeded 1.7 trillion dollars (EY, 2015). Digital Islamic fund services include micro-finance, crowfunding and mobile payments. The first information platform on Islamic finance was established in the USA. http://www.globalIslamicfinancemagazine.com, http://www.islamicfinanceservice.com are the most known information sites. The UK’s Al Rayan Bank (formerly the Islamic bank) is a pioneer in digital Islamic financial services. Online insurance services and mobile payment platforms have been developed in the United Arab Emirates. The first crowfunding platform was established in Egypt. Lebanon-based Zoomal.com is one of the major crow funding platforms in the Arab world.

The strengths and weaknesses, opportunities and threats of the digital Islamic economy can be seen in the following table.

Table. Swot Analysis on Digital Islamic Economy

Source: Nuray Terzi,  Basic Dynamics of Digital İslamic Economy, (in Turkish) IV. ECOEI, November, 15-17, 2018, Kocaeli, Turkey.

In addition to the rapid development of the Muslim population globally and the technological advances in the regions where the Muslim population the driving forces of economic growth will shape the future of the global Islamic economy and develop the digital Islamic services market. The development of halal infrastructure, the development of ethical and global standards in accordance with Islamic traditions, the increasing interest of global companies in Islamic markets and products and the development of digital services constitute the global dynamics in the development of Islamic economy.

The strong technological infrastructure accelerates the development of digital Islamic practices. The prevalence of Muslim young consumers increases the potential of the sector. There is a great demand for consumption of Islamic products and services. Although the digital Islamic economy serves a wide range of Muslim consumers, it also serves non-Muslim consumers. However, there is a great gap in the development of these sectors in terms of entrepreneurs. Digital Islamic economy develops more slowly in places where technological literacy is lower. The anti-Muslim opposition also affects the sector. It is also developing slowly in Muslim countries where women are less involved in education. However, digital media / platforms are one of the most practical ways to involve women in the economy. Increasing national and international cooperation in the development of the digital Islamic economy will help to move the sector forward. Moreover, the development of digital Islamic educational opportunities will contribute to the elimination of the need for specialized personnel in the sector.