Digitalization in Halal Management

Table of Contents

1. Frontmatter

2. Chapter 1. Halal Logo as Consumer Alternative Solution for Nutraceutical Products Issues

   Siti Nurunnajwa Shamsudin, Elistina Abu Bakar, Nusaibah Anuar Musaddad, Nuradli Ridzwan Shah Mohd Dali

   Abstract

   Nutraceutical is defined as any food or food component that provides medical or health benefits, including the treatment or prevention of disease. Nutraceuticals have sparked considerable interest recently due to their nutritional values and therapeutic benefits. However, a few issues related to this product could affect consumers, especially Muslims. This article examines the nutraceutical product issues regarding halal status, safety, and legality. Consumers need to protect themselves by choosing the best nutraceutical product in the market. Therefore, this study suggests that consumers choose nutraceutical products with a halal logo because they can be the benchmark for halal, safe, and good-quality products.

3. Chapter 2. Toward the Global Halal MSMEs Hub Through the Digitally Enabled Society: An Institutional Arrangement with Islamic N-Tuple Helix

   Sutan Emir Hidayat, Khairunnisa Musari

   Abstract

   This chapter develops the institutional arrangement concept by adopting the Islamic Helix approach to guide the Indonesian halal micro, small, and medium enterprises (MSMEs) to transform into a digitally enabled society toward a global halal MSMEs’ hub. This institutional arrangement also can be adopted by other emerging countries with Muslim-majority populations to manage Islamic social finance to fund entrepreneurship and MSMEs and through a digitally enabled society as an enabler to open the business innovation. By using a literature review of the empirical studies, then coupled with the argument for presenting the model of Islamic N-Tuple Helix theoretically as the approach to develop institutional arrangement, this chapter can be categorized as a Conceptual Paper with Models research design as a methodological approach. This chapter promotes the integration between Islamic Triple Helix and information and communications technology (ICT) or technologies toward Islamic Quadruple Helix to create a digitally enabled society. Then, to construct the framework of the Islamic N-Tuple Helix, this chapter proposes additional components, namely University and Environment, to develop the concept of the Islamic Quintuple Helix and Islamic Sextuple Helix.

4. Chapter 3. Harnessing Internet of Everything (IoE) for Sustainability of Halal Cosmetics Ecosystem

   Adlin Masood, Alina Abdul Rahim, Umi Hamidaton Mohd Soffian Lee

   Abstract

   Driven by the Islamic faith-inspired ethical consumption needs of affluent digital-savvy Muslims, comprising a third of the world’s population, halal spending on food, pharmaceuticals, cosmetics, fashion, travel, and media/recreation, reached US$2 trillion in 2021, reflecting an 8.9% growth compared to 2020 (Elasrag, 2016; GIER 2022). Consistent with this expansion, the halal cosmetics industry is projected to grow at a 4-year CAGR of 7.4% and reach US$93 billion in 2025 (GIER 2022). The increased interest in halal is brought on by the perspective that halal is a new paradigm and solution to global issues such as food safety, ethical and sustainable practices, environmental awareness, economic resilience, and animal welfare. Integrating the different dimensions of the halal economy for sustainability and expansion thus needs an innovative approach through the application of the Internet of Everything (IoE). The IoE concept is based on the notion of multifaceted integration, intelligence, and cognition whereby people, things, data, and processes are connected in a collective unified system, the objective of which is to enhance stakeholders’ practices and decision-making. This study seeks to analyze the feasibility of implementing IoE into the halal cosmetics ecosystem by examining the state of readiness of related agencies, institutions, industry players, and consumers, by examining current publications via a systematic literature review. In most parts, all stakeholders within the halal cosmetics ecosystem are ready to embrace IoE, a condition facilitated by COVID-19 pandemic restrictions that pushed the entire world to go online and adopt Industry Revolution 4.0 technology to continue their lives. Assuredly, the halal cosmetics ecosystem that is fortified with the implementation of IoE will ensure that halal stakeholders are abreast, with present and future situations, and enabled to make timely and more effective decisions thereby ensuring a sustainable trade.

5. Chapter 4. Digital Gold Investment Platform in Shariah Perspective: A Case Study of Quantum Metal

   Mohammad Aiman bin Mohammad Zakir, Mohamad Zaharuddin bin Zakaria, Ahmad Zaki Salleh, Abdul Manan Ismail, Mushaddad Hasbullah, Mohd Nasir Abdul Majid

   Abstract

   Gold investment has been popular among the investors for its good hedge against inflation. This is due to the high value of the commodity that the gold stores. There is a question, however, whether digital gold investment is permissible or not? The Accounting and Auditing Organization for Islamic Financial (AAOIFI) shariah Standard in Gold Investment and Gold Investment Parameter issued by 96th Muzakarah of The National Fatwa Committee (MFK) in 2011 have been referred to ensure the halal compliant of the digital gold investment. Quantum Metal is a new digital platform that offers three premier products which are the Gold Savings Account (GSA), Gold Currency Account (GCA), and Gold Advance Enhancement (GAE). This paper highlights the halal principles underlying these products in addition to the approval of the International shariah Research Academy for Islamic Finance (ISRA) consultancies and how it could make the Quantum Metal (ISRA 2021), as a shariah-compliant gold digital investment platform, to improve the economic growth during the economic crisis. This research is conducted using primary data sources, digital gold investment contracts, journals, and interviews. It is found that the Quantum Metal Digital Gold investment platform is compliant to the halal standard of gold investment.

6. Chapter 5. Overview of Halal-Integrated Platform (HIP) Adaption as a Halal Digital Economy Hub for Small–Medium Enterprises (SMEs) in Malaysia

   Zahariah Sahudin, Mohamad Idham Md Razak, Lennora Putit, Mohammed Hariri Bakri

   Abstract

   The world halal industry and the domestic market are expected to reach up to RM20.92 trillion and RM473.57 billion, respectively, in 2030. The local halal industry has contributed as much as 7% toward the Gross Domestic Product (GDP) of the country in 2020. It indicates that Malaysia has the potential to be one of the world's halal market hubs that have contributed to local economic growth. As stated in the 12th Malaysia Plan (MP12), the major focus of local economic synergy is to strengthen the local halal industry by creating more opportunities and positive competition among key industrial players to ensure the sustainability of economic growth. The Halal Development Corporation (HDC) has launched the Halal-Integrated Platform (HIP) to introduce Malaysia as a halal digital economy hub. This initiative allows the country to maximize the benefits of multiple aspects of the Fourth Industrial Revolution (IR 4.0). This study will put attention to the overview of HIP adaption as a halal digital economy hub for Small–Medium Enterprises (SMEs) specifically in Malaysia. The existence of HIP enables local halal industry players to connect with global halal players effectively and sustainably as well as helps companies to grow their business capabilities, backed by halal certification.

7. Chapter 6. Sustainable Development Goals Concept Overview in the Digital Service Halal Certification in Indonesia

   Zulfia Hanum Alfi Syahr, Dian Hafit Syaifullah, Buyamin, Novian Uticha Sally

   Abstract

   Business actors receiving a halal certification can contribute directly to realizing Sustainable Development Goals (SDGs) dimensions: economic, social, and environmental. The halal certification application has been developed using digital technology to facilitate access and speed up the service process. The halal policy for food products indicates the sustainability of beverage, pharmaceutical, cosmetic, and service providers. However, the problem arises of how products that have passed the halal certificate can be reviewed for sustainability in terms of economic, social, and environmental aspects in their development in the era of digital product services. The goal is that consumers and business actors increasingly believe in the urgency of halal certification to support the sustainability of products and services produced from an economic, social, and environmental perspective. Thus, it will impact business actors who are increasingly motivated to register their products and services to have halal certificates, especially with the application of digital technology to make it easier for users. Therefore, in this study, we will examine the concept of Sustainable Development Goals (SDGs) on products that have passed the halal certification. This concept will review how to analyze the social, economic, and environmental impacts on the life cycle of halal products. The method used is qualitative, with a literature review in the form of a narrative review of the latest globally indexed scientific articles. They were then analyzed with a classification approach based on objectives, research questions, results evaluation, and knowledge contribution. The result is that the concept of SDGs in halal certification is critical to study with the conceptual framework of its analysis. This paper will explore more deeply because it aligns with the global SDGs program.

8. Chapter 7. Innovation in Halal Supply Chain Management (HSCM)

   Budi Harsanto, Egi Arvian Firmansyah

   Abstract

   Amid the rapidly growing literature on halal supply chain management (HSCM), previous researchers highlighted the scarcity of knowledge on innovation in the context of HSCM. Besides halal regulation, HSCM is concerned with the value-driven approach and ethical business practices. This paper aims to understand the innovations in the context of HSCM. The method used is a systematic literature review on the academic database of Scopus. Content analysis is used with a structured and objective process of data extraction. A coding list is developed based on the typology of technical/technological–administrative/organizational and theoretical concepts of supply chain innovation type. The findings show that the study on innovation in HSCM is interdisciplinary, with technological innovation, including digitalization, being less researched than organizational innovation. It is also found that many studies focused on internal HSCM rather than externals, both upstream and downstream, indicating the current challenges faced by the firms. This study contributes to the HSCM literature by being the first to link innovation with HSCM and be a baseline for future development.

9. Chapter 8. Halal and Digitalization: A Bibliometric and Content Analysis

   Anita Priantina, Devinna Pramitha

   Abstract

   Research on halal has been conducted in various disciplines and on various topics. Bibliometric analysis on halal-related studies has also been conducted several times. As information technology and computer-based applications develop rapidly, digitalization in the halal industry has become an emerging concern. This study aims to analyze the articles indexed by Google Scholar on the topics of halal and digitalization. This index is used to allow for wider coverage and to include articles in Bahasa Indonesia. This is important since halal certification has now become mandatory in the country. This has attracted researchers to conduct more studies on halal-related research. The keywords used are limited to halal and digital. Bibliometric and content analysis is used to structure the discussion and answer the research question. The result for articles in Bahasa Indonesia and articles in English are separated to see whether there is any difference. The result shows that the research topics in Bahasa Indonesia are dominated by Muslim-friendly tourism and digital marketing for almost all halal industry sectors. Papers in English have more varied topics including cryptocurrency but are dominated by cases in Indonesia and Malaysia. Therefore, research in Bahasa Indonesia related to halal and digitalization may cover uncovered topics such as halal bitcoin and cryptocurrency. Research in English may adopt cases from the two most mentioned cases, but with implementation in other countries.

10. Chapter 9. The Relationship Among Religiosity, Consumption, and Life Satisfaction of Muslim Workers

    Lola Fitria Sari, Syafruddin Karimi, Endrizal Ridwan, Mohamad Fany Alfarisi

    Abstract

    This study investigates the relationships among religiosity, consumption, and life satisfaction of Muslim workers in Padang, West Sumatera, Indonesia. Four hundred and twenty questionnaires were distributed to Muslim workers. The respondents are classified into hijra and non-hijra groups. Ideology, rituals, intellectual capacity, consequential and experimental aspects were used as indicators to quantify the independent variable, namely religiosity. Consumption is a moderating variable, and life satisfaction represents the dependent variable. Consumption and life satisfaction are positive and significantly influenced by religiosity. Data analysis was performed using structural equation modeling (SEM). Overall, empirical evidence explains the significant impact of religiosity on the economic life of Muslim workers.

11. Chapter 10. Halal in Islamic Business

    Abdul Muizz Abdul Wadud, Khalifah Muhamad Ali

    Abstract

    The article looks at the possibilities of employing halal regulation and certification to implement Islamic business practices in modern society. The current practices of halal regulation and certification, as well as the literature on Islamic business, were looked at to develop a workable plan for halal Islamic business. Islam recognizes and accepts various degrees of ethical commitment. A multilevel Islamic ethics framework and multilevel halal certification technique are offered to assist the application of Islamic business ethics in a relative setting. Two significant improvements may improve halal corporate practices: harmonizing global standards and governance structures and incorporating responsibility and ethical considerations into halal standards. Halal regulation and certification are effective instruments for assisting Muslims in adhering to their religious obligations in a globalized and diverse world. Disparities in the dependability and functioning of institutions and governance structures in various nations and sectors cause this diversity. Therefore, integrating specific tried-and-true methods from the field of CSR and incorporating ethics and responsibility criteria into halal standards may be used to produce halal regulation and certification. It may be accomplished via a multilevel strategy that provides Muslims with information about items and companies based on ethical and responsibility standards and Halal requirements.

12. Chapter 11. Comparative Analysis of Digitally-Enabled Community in Supporting the Halal Industry in Muslim Majority Countries in the ASEAN, Central Asia, and Maghreb Region

    Sutan Emir Hidayat, Khairunnisa Musari

    Abstract

    The halal industry has been acknowledged as one of the notable spheres in the world which develops fast and influences as well as transforms the insight into how business should be performed. The halal industry is no longer just a religious symbol but has developed into a universal symbol of quality, hygiene, health, and safety. This is certainly an opportunity to boost economic growth for countries with a majority Muslim population by taking a part in the halal industry. In the Association of Southeast Asian Nations (ASEAN) region, several member states stir globally the halal industry although digitalization in this region is currently in the early phase of development. By considering the eminence of digitalization in transforming the halal ecosystem and unleashing the halal industry growth, this chapter maps the digitally enabled community in supporting the halal industry in Muslim-majority countries in ASEAN, Central Asia, and the Maghreb Region. Central Asia countries cover Kazakhstan, Tajikistan, Kyrgyzstan, Uzbekistan, and Turkmenistan. Then, the Maghreb region consists of Algeria, Morocco, Tunisia, Libya, and Mauritania. All of those countries are Muslim-majority countries which a high potential to take part in the global halal trade. The halal industry is hoped to make remarkable support to the economic development of these regions. The outcome of this chapter is to encourage the information and communication technologies (ICT) field to have a crucial part in enabling the digitally enabled community to support the digitally enabled halal trade, which in turn inflicts the economic growth of the Muslim-majority countries in these regions.

13. Chapter 12. Analysis of Motives and Satisfaction with the Use of Islamic Website Media on Halal Food for Islamic Economics Students in Jabodetabek, Indonesia

    Riskayanto, Amri Dunan, Yanuar Farida Wismayanti, Bambang Mudjiyanto, Ahmad Budi Setiawan, Karman, Djoko Walujo, Ari Cahyo Nugroho

    Abstract

    As the country with the largest Muslim population in the world, Indonesia does not occupy the top position in the world’s halal industry. It will focus on the halal food sector as one of the sectors in the halal industry and the fact that Indonesia ranks at the top of the mobile e-commerce adoption by millennials. This phenomenon becomes very interesting to analyze. The authors conducted a descriptive study on the target audience of the Islamic economics students in Indonesia and Islamic social media as a digital communication medium. The researchers chose republika.co.id and eramuslim.com as objects with the assumption that they are currently the most popular digital media among Muslim students. The authors’ analysis drew on the uses and gratification theory, among others, to observe the gap between motives (gratification sought) and satisfaction (gratification obtained) in the use of social media. They found that the students’ highest expectation for using the website was on the motive of self-identity and information, whereas they considered eramuslim.com more desirable. However, the high value of expectations for eramuslim.com makes the gap in the motives of personal identity negative. According to the percentage criteria, the level of fulfillment of the motives expected from utilizing the two websites is high. In this criterion, the percentage level of fulfillment of self-identity motives with republika.co.id is higher than with eramuslim.com.

14. Chapter 13. Non-Muslim Acceptance of Halal Products in the Context of Business Development

    Koeswinarno, B. J. Sujibto, M. Fakhruddin, Siti Atieqoh

    Abstract

    This study explores the relationship between non-Muslim business actors and halal product regulation. The Halal Product Guarantee (HPG) was implemented in Indonesian state law to create the awareness and acceptance of non-Muslim business actors. To increase their economic value, Muslim and non-Muslim business actors should produce, distribute, and sell products which have test-passed halal criteria. This political-economic paradigm is essential for non-Muslim business actors being trapped in a sectoral and ideological framework. The qualitative approach adhered to the triangle parameter and was applied as an individual analysis unit for non-Muslim business actors in Yogyakarta and Semarang, Indonesia. Data were collected through in-depth interviews, observations, and documentation. This study identified a common thread between halal issues and their status as non-Muslim business actors. First, non-Muslim business actors do not interpret halal products as beneficial socio-economic interests for enhanced economic circulation. Second, they follow a sectoral and ideological framework cantered solely on Islamic interests, causing social issues. These two findings emphasize the state's role in socialization and negotiations, specifically with these business actors. Therefore, the implementation of Halal Product Guarantee Law was justified as common ground for enhancing economic value and community welfare.

15. Chapter 14. What Drives Travelers to Recommend Halal Destinations? Reflections on Aceh, Indonesia

    Cut Kesuma Pahlufi, Edwin Darmasetiawan, Muhammad Dharma Tuah Putra Nasution, Ku Halim Ku Ariffin

    Abstract

    Halal tourism is not solely limited to the provision of halal food services and religious ritual facilities; it is necessary to shape the unique aspects of halal tourism in various destinations. Halal tourism may restrict the activities that travelers may engage in, notwithstanding the convenience of visiting several locations. Concerns over the restricted activities travelers may engage in during their visit to the destinations would elicit diverse perceptions. Some travelers may have a favorable perception of this place, while others may have a different one. Accordingly, the objective of this paper is to explore the perceived values of travelers and the kinds of perceptions that stimulate them to recommend halal tourism destinations. We hope that the paper will contribute to the enrichment of knowledge, especially in the field of halal tourism marketing.

16. Chapter 15. Social Media Marketing and Halal Brand Equity

    Yossie Rossanty, Endang Sulistya Rini, Beby Karina Fawzeea Sembiring, Amlys Syahputra Silalahi

    Abstract

    Despite the growing body of studies on social media marketing, to date, halal brand equity has gotten little concern in the context of social media marketing. We assume that halal brand equity represents the value of a brand that is different from the common brand value. The establishment of brand equity in a halal brand begins with the individual’s selective processing of the brand based on prior consumption experiences, which leads to the formation of attitudes and behaviors toward the brand. Accordingly, this study will attempt to explore the literature related to social media marketing and halal brand equity.

17. Chapter 16. The Role of Interactive Social Media and Emotional Value on Halal Cosmetic Purchase Intention

    Fitriani Tobing, Abdul Rahman Lubis, Permana Honneyta Lubis, Syafruddin Chan, Said Musnadi

    Abstract

    This chapter aims to describe and discuss interactive social media and emotional values that play an important role in influencing the intention to purchase halal cosmetics. This study adopts a content analysis technique where various sources are referred to including research articles, official documents, and reports. The large number of cosmetic choices available in the market raises concerns for Muslim consumers because of the safety factor of the ingredients contained in cosmetics, whether they are safe from ingredients that are not prescribed by Islamic teachings. Cosmetics that have a halal logo can affect the emotional value of consumers because for them by buying halal cosmetics they feel that the products they consume have followed religious rules or the orders of Allah SWT. This perceived utility influences consumer buying behavior. The role of interaction on social media is also very important in providing information, reviews or reviews from consumers who have used halal cosmetics so that they are able to change consumer perceptions or beliefs to buy cosmetics that have a halal logo.

18. Chapter 17. Development of Halal Travel and Tourism in Indonesia

    Endang Sulistya Rini, Muhammad Dharma Tuah Putra Nasution

    Abstract

    This chapter aims to elaborate and discuss on challenges and opportunities of halal travel and tourism in Indonesia. The study adopts content analysis technique where various sources are referred including reports, official documents and research articles. The development of halal tourism is positive but needs significant initiatives by the stakeholders. Other opportunities of halal travel and tourism also have been revealed to be used as valuable information for strategic planning and initiatives.

19. Chapter 18. Halal Lifestyle, Trends, and Branding of Muslim Societies in Indonesia

    Ahmad Rafiki, Fahmi Natigor Nasution

    Abstract

    This chapter aims to elaborate and discuss on challenges and opportunities of the halal lifestyle, trends, and branding of Muslim societies in Indonesia. The study adopts a content analysis technique where various sources are referred including reports, official documents, and research articles. The halal lifestyle, trends, and branding have positive development but need significant initiatives by the stakeholders. Other opportunities for halal lifestyle, trends, and branding also have been revealed to be used as valuable information for strategic planning and initiatives.

20. Chapter 19. The Challenges to Get Halal Certificate for Henna Cosmetic: An Analysis from Islamic Perspective and Medical Benefits

    Muhammad Remy Othman, Sayidah Asma Basir, Norhidayah Pauzi, Zalina Zakaria

    Abstract

    The demand of the world's Muslim community for cosmetic products certified as halal by Halal Malaysia or Foreign Halal Certification Body is very high. This high demand is driven by the strength of the holistic halal ecosystem system that includes material review, management, and several other systems inter alia, the Halal Assurance System, Laboratory Analysis, and Halal Training. These systems have further strengthened consumers’ confidence in Malaysia's halal-certified products. Despite that, in terms of legal provisions, Procedure 6(5) in the Malaysian Halal Certification Procedures Manual (Domestic) 2020 provides that products with negative implications for religion and society such as cigarettes, drugs, hair dyes, and nail dyes are not eligible to apply for the halal certificate. Henna or the scientific name Lawsonia inermis is common ingredient used in hair and nails dye products. Based on the provisions above, hair and nail dye products including those based on henna are not eligible to apply for and obtain Malaysian halal status because they fall under the category of hair and nail dyes. The issues are what is the rule on the usage of henna, and to what extent do henna cosmetic products get Malaysian Halal Certification? The objective of this paper is to analyse the findings of benefit of henna from an Islamic and medical perspective. This paper uses qualitative methods to analyse the data. The findings will analyse the needs for re-evaluation by the Malaysian Halal Certification body for henna-based cosmetic products in order to be given halal certification. This is because the initial findings of the study show that the use of henna as ornamental colour is required by Shariah, especially for women. In fact, scientific evidence shows that henna has several benefits of its own, such as being rich in antioxidant compounds that can treat wounds. Therefore, if henna-based products are produced from natural henna, free from prohibited chemicals, safe to use, clean, and pure, it is submitted that the henna cosmetic products are eligible to be considered and be given Malaysian halal status.

21. Chapter 20. Prospects of Halal Supply Chain in Muslim Emerging Countries

    Pipit Buana Sari, Yossie Rossanty

    Abstract

    This chapter aims to elaborate and discuss on prospects of the halal supply chain in some emerging countries. The study adopts content and bibliometric analyses where various sources are referred including reports, official documents, and research articles. The halal supply chain has positive development as well as prospects. There are potentials and relationships of halal supply chain with other sectors/industries that can be expanded. Significant initiative by the stakeholders is vital to ensure the continuous development of the halal supply chain. Other opportunities for a halal supply chain also have been revealed to be used as valuable information for strategic planning and initiatives.