Analysis of the Awareness Level of Indonesian Non-Muslim Consumers on Halal Products: A Case Study of Non-Muslim
Consumers in Malang City
Detry Ajeng Pratiwi1*, Ratih Hendayani1, Indrawati1
1 Management of Business in Telecommunication and Informatics, Telkom University, Bandung, Indonesia
*Corresponding Author: detryajengp@student.telkomuniversity.ac.id Accepted: 15 May 2021 | Published: 1 June 2021
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Abstract: The development of the industrial revolution 4.0 has resulted in the emergence of great industrial opportunities due to varied production demands and changing people's lifestyles. Indonesia is a country that develops various industrial sectors, one of which is the halal industry. Halal has become the main topic of discussion in the business world, especially in the culinary industry. Halal consumption is mandatory for Muslims, but many non-Muslim groups also make it the first choice. This study discusses the level of consumer awareness in Malang City, especially non-Muslims concerning the halal food they consume every day which is influenced by several factors. This study aims to measure and analyze the level of awareness of non-Muslim consumers in Malang City towards halal products and measures the effect of religious belief, health reason, logo certification, exposure, toward Halal Supply Chain Awareness. The method used in this research is Structural Equation Modeling (SEM) and the data is processed using smartPLS. Based on the results of the study, it can be concluded that the four variables have a significant influence on halal supply chain awareness and have a relationship with it.
Keywords: Halal Supply Chain Awareness, religious belief, health reason, logo certification, exposure
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1. Introduction
Indonesia recognizes Islam, Hinduism, Protestant Christianity, Catholic Christianity, Buddhism and Confucianism as the six official religions in the country (Gurbantara, 2016).
Below is the percentage of religions in Indonesia.
Table 1: Percentage of Religions in Indonesia
Religion Percentage (out of total population)
Islam 87.2%
Protestant Christianity 6.9%
Catholic Christianity 2.9%
Hinduism 1.7%
Buddhism 0.7%
Confucianism 0.05%
Source: Processed data (Indonesia.go.id, 2020)
It is shown in Table 1 that Islam greatly influences the development of culture in society with a percentage of 87.2%, including the consumption pattern of halal products (Indonesia.go.id, 2020).
The industrial revolution 4.0 is a phenomenon that combines network technology and automation technology. It is also called a "cyber physical system" in which the concept of implementation is centered on automation. With the help of information technology in its implementation processes, the involvement of human workers can be reduced. Thus, the effectiveness and efficiency of the work environment will automatically increase. In the industrialized world, it has also a major impact on the quality of work and costs of production (Rizkinaswara, 2020).
The development of the industrial revolution 4.0 has created great industrial opportunities due to varied production demands and the changing lifestyle of society. Indonesia as a country that develops various industrial sectors also focuses on developing the halal food industry (Tarigan, 2019). The halal food industry which is in great demand by the majority of the Muslim population in Indonesia will be more efficient and have many opportunities to develop in the era of Industry 4.0. The existence of increasingly sophisticated technology allows everyone to be connected on social media which will bring many benefits for business people, customers and so on (Zahrah & Fawaid, 2019).
Halal is a very important word and must be embedded in the lives of Muslims whether in Muslim majority or minority countries. Therefore, the increasing number of Muslim population in Indonesia and other countries provides more opportunities for the Indonesian halal products and tourism industry (Mastiyanto, 2018). Starting from 17 October 2019, all food and beverage products circulating in Indonesia, both domestic and imported, must have halal certification (Rossa & Halidi, 2019).
Halal certification is not only in demand by Muslim entrepreneurs, but is also considered important by non-Muslim entrepreneurs. For example, in Bali, although the majority of the people there are Hindus, the non-Muslim entrepreneurs have a high enthusiasm to certify their products as halal. Lukmanul Hakim, Director of the LPPOM Indonesian Ulama Council, observed and revealed that the enthusiasm for obtaining halal certification is evenly distributed in various places, both in cities that are dominated by Muslim entrepreneurs and those that are not. It is because halal certification has become an important thing in business. "So, the awareness of entrepreneurs to certify their products as halal is increasing and evenly distributed." (Republika.co.id, 2015).
In 2015, Indonesia was awarded the World's Best Halal Travel Destination (Kominfo.go.id, 2019). This has encouraged Malang City to take steps to become a World Halal Destination.
The first thing that must be done to become a halal tourism city is to define the halal context in relation to the city. For this reason, several parties who participated in designing the program of Malang as a halal destination city have formulated the idea of zero zone activities which are expected to be able to touch all levels of society. With this strategy, it is hoped that the public can more easily understand the concept of halal which will be implemented in Malang City as a halal destination (Rutmawati, 2016). Malang City is increasingly enthusiastic about making its city a halal tourist destination. Several tourist objects and attractions are now starting to be renewed and have been certified halal (Anggraeni, 2019).
Based on the background of the problem above, the researchers are interested in researching and digging further information about the level of consumer awareness of halal products in Indonesia, especially non-Muslim consumers in Malang City by using variables of religious belief, health reason, logo certification, and exposure.
2. Literature Review
2.1 Operational Management
Operational management is an application of management science aimed at managing all production activities or operations to run effectively (Subagyo, 2000:1). In addition, operational management can also be defined as a series of activities that generate value in the form of goods and services by converting inputs into outputs (Heizer & Render, 2015:3).
2.2 Supply Chain Management
In the opinion of Heizer & Render (2015:4), Supply Chain Management (SCM) is a global network of organizations and activities that supply a company with goods and services. Value for customers is created through three functions namely marketing, operations and finance.
However, companies are rarely able to create value on their own as they rely heavily on suppliers to meet their various needs from raw materials to accounting services. Thus, it can be concluded that Supply Chain Management (SCM) is an activity that involves suppliers, factories or manufacturers, logistics providers and customers.
2.3 Halal Supply Chain
According to Omar dan Jaafar (2011), Halal Supply Chain has three important points to maintain the halal status of a product. The first is the supplier's obligation; the obligation here means that the supplier must always supply halal goods. Second, the transformation from raw goods to finished goods. All transformation processes in the production system, from raw materials to finished goods, must be clearly recorded so that they can be evaluated appropriately. And the third is the distribution system. In the distribution system, some products can easily be contaminated with non-halal products. So that producers must pay attention to the distribution process to ensure that their products are kept halal up to the hands of consumers.
2.4 Halal Supply Chain Awareness
Awareness can be defined as knowledge or perception of situations or facts that are part of behavior. Subjectively speaking, awareness is a relative concept in which a person may be partially aware, unconsciously aware or perhaps acutely aware of a problem related to the halal aspects of what is permitted by Allah. The word "awareness" means the knowledge or understanding of a particular subject or situation. Awareness means that someone as an individual has personal thoughts about the state of something, so that everyone has different levels of awareness in interpreting something (Osman & Aziz, 2018). So, awareness describes human perceptions and cognitive reactions to a condition of what they eat, drink and use.
2.5 Religious Belief
Religion means a bond that must be held and obeyed by humans (Nasution, 2003:57).
Meanwhile, there is a difference between the terms religion and religiosity, if religion refers to the formal aspects related to discipline and obligations, then religiosity refers to the religious aspects that are in a person's heart (Ghufron & Risnawita, 2018:167). Religious belief is belief in the reality of the mythological, supernatural, or spiritual aspects of a religion.
2.6 Health Reason
Consumers' awareness of halal products is not only determined by the motivation of religious belief, but also health reasons related to daily consumption (Bonne et al., 2007). Therefore, the government and food-related institutions should use health reasons as an alternative source of information policies to convince Muslim and non-Muslim consumers about the importance of halal awareness.
2.7 Logo Certification
Logo refers to the name of an entity specially designed using specific typeface technology. It can also be interpreted as a symbol of an organization or individual that reflects the meaning or message to be conveyed. A logo is an identity; a good logo will also reflect the good impression of the owner. Meanwhile, certification is the process of controlling certificates for goods or services (Rustan, 2009:12). Law Number 33 of 2014 concerning Halal Product Guarantee (JPH Law) which was promulgated in 2019 further reinforces the importance of halal status. This makes halal certification an important tool for the success of the global industry, especially the halal world. Products with halal certification have many competitive advantages because a halal certificate is a guarantee that the product has been thoroughly investigated and declared in accordance with Sharia law. Therefore, the attached logo and halal certificate can convince Muslims to consume the product.
2.8 Exposure
Exposure can be defined as listening, viewing and reading news media or activities that involve experience and concern for something (news) from an individual or group. Exposure means a clearly stretched description or explanation (Ardianto et al., 2014:168).
Based on a review of the predecessor literature, the framework of this research can be formed as follows:
Figure 1: Framework
Source: Operational Variables are adopted from Osman dan Aziz (2018); Kurniawati dan Savitri (2019)
This research framework combines the research variables of Osman and Aziz (2018) and the research variables of Kurniawati and Savitri (2019) which are compiled as in the figure above regarding the measurement and analysis of the awareness level of Indonesian non-Muslim consumers on halal products. The researchers have the following hypotheses:
H1. There is a relationship between the awareness of Indonesian consumers on halal food and religious belief.
H2. There is a relationship between the awareness of Indonesian consumers on halal food and health reason.
H3. There is a relationship between the awareness of Indonesian consumers on halal food and the halal certificate logo (logo certification).
H4. There is a relationship between the awareness of Indonesian consumers on halal food and exposure.
3. Methodology
3.1 Operational Variables
Breaking the research variables into their smallest pieces will make it easier to obtain the data needed for the evaluation of the research question (Indrawati, 2015:124). The following is an operational table of variables in which each of these questions was adopted from research in the reference journal entitled Awareness Level Analysis of Indonesian Consumer toward Halal Products:
Table 1: Operational Variables
Variable Indicator Item
Code Awareness Criteria
(AC)
I understand what halal is AC1
When I buy food products, they must be halal AC2
I always consume halal food products AC3
I think halal food is very important AC4
Buying halal products has become part of my lifestyle AC5
I know halal food products AC6
Food processed from non-halal materials is haram to eat AC7 Alcoholic drinks are prohibited from drinking (haram) AC8 Religious Belief (RB) In my religion, it is recommended to consume halal food RB1 In my religion, it is obligatory to consume halal food RB2 Health Reason (HR) Halal food provides many health benefits for the body HR1
Halal food is guaranteed to be clean HR2
Consuming halal food can prevent disease HR3
Logo Certification (LC) I know that the logo below is the Indonesian halal logo (includes the MUI logo image)
LC1 MUI is the institution that issues Indonesian halal certificates LC2 The halal logo is very important to ensure that the food is halal LC3 The food products I buy must have a halal logo LC4 The halal logo is a top priority for buying food products LC5 Halal labeled food products are easy to find in supermarkets LC6 I will not buy food products that do not have a halal logo LC7 Exposure (E) I have enough information about halal products E1
I often seek information about halal food products E2 I always update information about halal food products E3 People around me provide information about halal products E4 The mass media (television, newspapers, magazines, brochures, and the internet) have provided sufficient information about halal products
E5 The government has provided sufficient information regarding halal food products
E6 The community is very effective in providing information related to halal food
E7 The role of the media (television, newspapers, magazines, brochures, and the internet) is very effective in providing understanding related to halal food
E8
The role of the government is very effective in providing understanding related to halal food
E9 Source: Operational Variables are adopted from Kurniawati dan Savitri (2019)
3.2 Population
According to Umar (2013:137), population is a collection of elements that have certain characteristics in common and have the same opportunity to be selected as a sample.
Furthermore, Sekaran & Bougie (2016:236) stated that population is a collection of events, people or objects that are interesting to research. Meanwhile, according to Indrawati (2015:164), population is a group of people, events, and objects that attract researchers to analyze. The population of this research is the non-Muslim community in Malang City.
3.3 Sample
Referring to Indrawati (2015:164), sample is a member of the population selected to be involved in the research, either to be observed or to be asked for their opinion about the content of the research. Meanwhile, Sekaran & Bougie (2016:237) argued that sample is part of the population. The sample required in this study was determined by distributing questionnaires to 100 non-Muslim respondents in Malang City. A non-probability technique with a purposive sampling method is used in the sampling process.
3.4 Validity and Reliability Tests
According to Indrawati (2015:146), validity shows the extent to which a measuring instrument can measure the content to be measured. So, it can be said that the higher the effectiveness of the measuring instrument, the more precise the results will be or the clearer what content should be measured. Furthermore, Surjaweni (2015:158) explained that the significance test was carried out by comparing r count with r table, involving a sample size of 30 and a significance level of 0.05. The criteria for decision making in the validity test are as follows:
1) If R count ≥ R table, then the question item is valid 2) If R count < R table, then the question item is not valid
In this study, researchers used the SPSS version 25 application to perform more valid calculations, while the acceptable error rate was 0.05 with 30 respondents, and the r table obtained was 0.361.
On the other hand, reliability has something to do with trustworthiness, consistency, or the stability of the measurement results. The reliability test was carried out simultaneously for all statements. Reliability is a feature that a result can be measured well. In other words, the extent to which the measurement results can be trusted or the extent to which the measurement results are free from measurement errors (Indrawati, 2015:155). The reliability test of this study used the Cronbach's Alpha calculation technique with SPPS software version 25. In general, the reliability <0.60 is considered bad, the reliability in the range of 0.70 is acceptable, and> 0.80 is considered good (Sekaran, 2006:182). Validity and reliability tests can be done using calculations in the SPSS software. The results of the validity test are summarized in Table 3 below:
Table 2: Validity and Reliability Test Results Validity test result of questionnaire
Item for awareness
Item r count r table Conclusion
AC1 0.430 0.361 VALID
AC2 0.723 0.361 VALID
AC3 0.693 0.361 VALID
AC4 0.753 0.361 VALID
AC5 0.867 0.361 VALID
AC6 0.569 0.361 VALID
AC7 0.531 0.361 VALID
AC8 0.607 0.361 VALID Item for religious belief
RB1 0.732 0.361 VALID
RB2 0.619 0.361 VALID
Item for health reason
HR1 0.790 0.361 VALID
HR2 0.745 0.361 VALID
HR3 0.836 0.361 VALID
Item for logo certification
LC1 0.742 0.361 VALID
LC2 0.720 0.361 VALID
LC3 0.566 0.361 VALID
LC4 0.692 0.361 VALID
LC5 0.778 0.361 VALID
LC6 0.513 0.361 VALID
LC7 0.555 0.361 VALID
Item for health exposure
E1 0.600 0.361 VALID
E2 0.770 0.361 VALID
E3 0.790 0.361 VALID
E4 0.706 0.361 VALID
E5 0.689 0.361 VALID
E6 0.773 0.361 VALID
E7 0.802 0.361 VALID
E8 0.648 0.361 VALID
E9 0.704 0.361 VALID
Reliability test result of questionnaire
Cronbach’s Alpha N of Items Conclusion
Reliability 0.960 29 Reliable
3.5 Data Analysis Technique 3.5.1. Partial Least Square (PLS)
According to Abdillah & Hartono (2015:161), Partial Least Square (PLS) analysis is a multivariate statistical technique that makes comparisons between multiple dependent variables and multiple independent variables. PLS is also defined as a variant-based SEM statistical method designed to solve multiple regression when specific problems occur in data, such as small study sample size, missing data, and multicollinearity. SmartPLS can test formative models and reflective models with different index measurement ranges in one model.
Any type of scale (category ratio, Likert, etc.) can be tested in a model.
3.5.2. Hypothesis Testing
A hypothesis is a logically estimated relationship between two or more variables expressed in the form of a testable statement or prediction regarding the possible outcomes of a study.
(Sekaran & Bougie, 2017:119). The formulation of a hypothesis should be based on rational thinking capable of providing a reasonable explanation. Thus, the approach commonly used in formulating research hypotheses is rationalism.
The hypotheses in this study aim to examine the effect of Halal Supply Chain Awareness on religious belief, health reason, logo certification, and exposure. The hypotheses applied are the null hypothesis (H0) and the alternative hypothesis (Hα). H0 is a predictive determination which states that there is no influence of variable X on variable Y, while Hα is the opposite (there is an influence).
Researchers only want to know the effect between variable X and variable Y, so when the output results on the smartPLS application show positive results, the hypothesis is accepted
and when it shows negative results, the hypothesis is rejected. The following hypotheses will be used by researchers, namely:
1) The first hypothesis H0.1: β 1 = 0 Hα.1: β 1 ≠ 0
H0 1: There is no or no relationship between consumer awareness of Malang City towards halal food and religious belief.
Hα 1: There is an influence or there is a relationship between consumer awareness of Malang City towards halal food and religious belief.
2) The second hypothesis H0.2: β 2 = 0
Hα.2: β 2 ≠ 0
H0 2: There is no influence or no relationship between consumer awareness of Malang City towards halal food for health reasons.
Hα 2: There is an influence or there is a relationship between consumer awareness of Malang City towards halal food for health reasons.
3) The third hypothesis H0.3: β 3 = 0
Hα.3: β 3 ≠ 0
H0 3: There is no influence or no relationship between consumer awareness of Malang City towards halal food and logo certification.
Hα 3: There is an influence or there is a relationship between consumer awareness of Malang City towards halal food and logo certification.
4) The fourth hypothesis H0.4: β 4 = 0
Hα.4: β 4 ≠ 0
H0 4: There is no influence or no relationship between consumer awareness of Malang City towards halal food and exposure.
Hα 4: There is an influence or there is a relationship between consumer awareness of Malang City towards halal food and exposure.
4. Results and discussion
4.1. Respondent Characteristics
Respondent characteristics have an important role in describing the respondents in the study as a whole. Respondent characteristics aim to ensure that the information obtained by researchers comes from competent respondents. This research was conducted by distributing questionnaires to the non-Muslim community in Malang city. Therefore, a screening question was needed on the distributed questionnaire. This study involved 100 respondents.
4.2. Partial Least Square (PLS) Analysis
The data obtained were processed using smartPLS software, PLS algorithm and the model was processed by bootstrapping (structural model). The structural model in this study is the influence of Y1, Y2, Y3, and Y4 on X. In this model, the endogenous latent variables are Y1, Y2, Y3, and Y4, while X is the exogenous latent variable. Constructs or latent variables in this structural equation include X, Y1, Y2, Y3, and Y4, each of which has an indicator in it.
4.2.1 Evaluation of Outer Model
The measurement model (outer model) is carried out directly on indicator variables related to factor or latent variables. All factor loading or loading indicators greater than 0.7 are concluded as reliable indicators (Ghozali & Latan, 2015:74). The results of direct measurement of the indicator variable can be seen in Figure 2:
Figure 2: Results of Data Model after Measurement
Figure 2 shows that the outer loading value is above 0.7, which means that the indicators of each factor or variable are considered valid. The Variance Inflation Factor (VIF) test is carried out to check whether there is multicollinearity at the outer model level. According to Cooper and Schindler in Indrawati (2015:191), if the tolerance value is less than 1 or VIF is greater than 10, then there is a significant multicollinearity problem. The results of the Outer Model VIF values are presented in Table 5 below:
Table 5: VIF values of the Outer Model
Latent Variable Indicator VIF
Awareness Criteria AC1 121.689
AC2 5.012
AC3 43.719
AC4 2.783
AC5 3.026
AC6 44.152
AC7 123.477
AC8 2.210
Religious Belief RB1 4.543
RB2 4.543
Health Reason HR1 1.488
HR2 1.521
HR3 1.948
Logo Certification LC1 2.547
LC2 2.863
LC3 5.739
LC4 9.401
LC5 3.766
LC6 4.206
LC7 3.729
Exposure E1 4.133
E2 4.491
E3 3.669
E4 1.850
E5 2.399
E6 2.780
E7 3.139
E8 2.180
E9 3.500
Table 5 shows that there are still indicators whose Outer Model VIF values are more than 5 and even more than 10. VIF values greater than 10 are said to have multicollinearity problems at the outer model level. Indicators that have a value of more than 10 are AC1, AC2, AC3, AC6, AC7, LC3, and LC4, so some items must be removed from the model. The following is an outer model where the indicators of AC3, AC6, AC7, LC3, and LC4 have been removed from the model because they have VIF values above 10.
Figure 3: Results of Data Model After Trimming
After completing the data measurement and trimming process, all indicators in the model are valid because they have a value of not more than 10. The researchers then performed a Construct Reliability and Validity analysis. Values deemed reliable should be above 0.70. The results can be seen in Table 6:
Table 3: Results of Construct Reliability and Validity Analysis Cronbach’s
Alpha rho_A Composite
Reliability (CR)
Average Variance Extracted (AVE) Awareness
Criteria
0.898 0.905 0.924 0.710
Religious Belief 0.938 0.938 0.970 0.942
Health Reason 0.756 0.765 0.860 0.673
Logo Certification 0.910 0.924 0.933 0.736
Exposure 0.919 0.925 0.933 0.607
Based on Table 6, it can be seen that all variables have a Cronbach's Alpha value above 0.7, so it can be said that all of these variables are reliable.
4.2.2 Inner Model Evaluation
In measuring the inner model, the researchers tested the R square and Q square to determine the accuracy of the prediction (R square) and the relevance of the prediction (Q square). The results of the R square and Q square are presented in Table 7.
Table 7: Results of R square and Q square
R square R square Adjusted Q2(=1-SSE/SSO)
Awareness Criteria 0.774 0.764 0.532
Table 7 shows that variable X, namely Awareness Criteria, has an influence on the Y variables, namely religious belief, health reason, logo certification, and exposure. The R square value of the awareness criteria variable is 0.774 with an adjusted R square value of 0.764 because the adjusted R square value is more than 50%, so the effect of the variable Y on X is strong.
Meanwhile, the Q square value of the awareness criteria variable is 0.532, it can be concluded that the variable has a value greater than 0, meaning that the model is said to have predictive relevance.
4.3. Hypothesis Test
Original Sample (O) or std. beta was used for testing the hypotheses instead of t statistic because it only assesses whether the variables have an influence or not (Ghozali, 2016:98). If the smartPLS value is positive, there is an influence. However, if the value is negative then there is no effect. The results data regarding the direct and indirect effects are presented in table 8 below.
Table 8: Results of Direct and Indirect Effects Hypothesis Relationship
Original Sample
(O)
Sample Mean
(M)
Standard Deviation (STDEV)
T Value P
Value Result H1 RB -> AC 0.589 0.592 0.082 7.171 0.000 Accepted H2 HR -> AC 0.172 0.176 0.083 2.081 0.038 Accepted H3 LC -> AC 0.622 0.628 0.085 7.293 0.000 Accepted H4 E -> AC 0.630 0.618 0.115 5.486 0.000 Accepted
Based on Table 8, it can be seen that the parameter coefficient for the religious belief variable on awareness criteria is 0.589, health reason is 0.172, logo certification is 0.622, and exposure is 0.630 which means that there is an influence of the four variables on awareness criteria. The T value is greater than the T table which is 1.98 and the P value is smaller than the significance value. Thus, H0 is rejected and H1 is accepted, meaning that these four variables have an effect
on the awareness criteria. Therefore, the first, second, third, and fourth hypotheses are accepted.
5. Conclusion
This research was conducted on non-Muslim communities in Malang City as the target respondents. The purpose of this study was to determine how aware non-Muslim consumers in Malang are on halal products and whether consumer awareness of halal products has a relationship with religious belief, health reason, logo certification, and exposure. Based on the results of data analysis and testing, it can be concluded that the awareness of non-Muslim consumers in Malang city on halal products is quite good. It was revealed that Religious belief has a significant relationship with halal supply chain awareness (awareness criteria), Health reason has a significant relationship with halal supply chain awareness (awareness criteria), Logo certification has a significant relationship with halal supply chain awareness (awareness criteria), and Exposure has a significant relationship with halal supply chain awareness (awareness criteria).
In order to increase halal supply chain awareness, especially among non-Muslim consumers, it is recommended that distributors of halal products should strengthen matters related to religious belief. In addition, the product being made must be ensured to be safe. Furthermore, it must also be guaranteed that halal certificates in Indonesia are only issued by MUI as the official stakeholder. And last but not least, education and information related to halal products must be adequately provided.
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