Vol 2, No 1 (2021) 1–5

Explor­ing fac­tors of choos­ing halal cos­met­ics among cos­met­ics entre­pre­neurs in Malaysia

Ali­na Sham­sud­din¹, Farah­wahi­da Mohd Yusof² and Nur Syazwina Uzma Sulaiman¹

¹Fac­ul­ty of Tech­nol­o­gy Man­age­ment and Busi­ness, Uni­ver­si­ti Tun Hus­sein Onn Malaysia 86400 Par­it Raja Johor Malaysia
²Cen­tre of Research for Fiqh Sci­ence & Tech­nol­o­gy (CFiRST) Ibnu Sina Insti­tute for Sci­en­tif­ic & Indus­tri­al Research (ISI-SIR), Uni­ver­si­ti Teknolo­gi Malaysia 81310 Sku­dai Johor Malaysia.

Cor­re­spon­dence should be addressed to Ali­na Sham­sud­din: alina@​uthm.​edu.​my

Cite this: Nusan­tara Halal J. 2021, Vol. 2 No.1 pp. 1–5 (Arti­cle) | Received 24 March 2021 | Revised 3 May 2021 | Accept­ed 16 June 2021 | Pub­lished 30 June 2021 | http://​dx​.doi​.org/​1​0​.​1​7​9​7​7​/​u​m​0​6​0​.​2​0​2​1​v​2​p​0​0​1​-​005

Abstract

Halal cos­met­ics is expand­ing well in the man­u­fac­tur­ing sec­tor. It has gained the government’s atten­tion to sup­port its devel­op­ment. Gen­er­al­ly, the halal indus­try has been divid­ed into sev­en sec­tors which are food ser­vices, con­sumer goods, finan­cial, phar­ma­ceu­ti­cal, cos­met­ics, halal logis­tics, and tourism. This study attempts to address the influ­enc­ing fac­tors for choos­ing halal cos­met­ics among cos­met­ics entre­pre­neurs. The researcher adopts the quan­ti­ta­tive method to gath­er data from the respon­dents. A ran­dom sam­pling tech­nique was used. The find­ings indi­cate that the aware­ness among young halal cos­met­ics entre­pre­neurs is very high and there are high con­sump­tions of halal cos­met­ics among con­sumers that have become the push fac­tor of young cos­met­ic entre­pre­neurs to choose halal cos­met­ics as their products.

Key­words: Halal cos­met­ics, cos­met­ics entre­pre­neurs, halal indus­try, man­u­fac­tur­ing sector.

Introduction

Accord­ing to Glob­al Islam­ic Econ­o­my 2017/​2018, halal mar­ket demand is increas­ing day by day in the Islam­ic econ­o­my and is tar­get­ed to reach about RM12.3 tril­lion by 2021. Accord­ing to the report, the most lead­ing is the food indus­try. The halal cer­tifi­cates have been giv­en to many food indus­tries in Malaysia-by-Malaysia Islam­ic Devel­op­ment Depart­ment (JAKIM). How­ev­er, their next con­cern is main­tain­ing halal, qual­i­ty, and safe­ty of the food dur­ing han­dling, pro­cess­ing, trans­port­ing, and stor­ing. Con­se­quent­ly, Halalan Toyy­iban Risk Man­age­ment Plan (HTRMP) has been intro­duced by Badruldin et al. to help in man­ag­ing the halal and toyy­iban sup­ply chain, start from the pro­cure­ment until it reach­es the con­sumers [1].

Accord­ing to Badruldin et al., it is com­pul­so­ry to have the halal author­i­ty to man­age and con­trol the halal sup­ply chain in the right way [1]. There are many influ­enc­ing fac­tors for halal prac­tices, which include the tech­no­log­i­cal, orga­ni­za­tion­al, and envi­ron­men­tal (TOE) fac­tors.  More­over, it is found that cus­tomer pres­sure, orga­ni­za­tion­al readi­ness, and per­ceived ben­e­fits influ­enced the inten­tion to adopt halal ser­vices [2].  From the per­spec­tive of a busi­ness, halal becomes a new mar­ket force and brand iden­ti­fi­er which is now mov­ing into the main­stream mar­ket, affect­ing and chang­ing per­cep­tion on how busi­ness should be con­duct­ed, includ­ing from a mar­ket­ing point of view [3]. Baharud­din et al. assert­ed that small entre­pre­neurs take advan­tage of busi­ness oppor­tu­ni­ties in the Halal indus­try [2]. As a result, the halal indus­try has a great poten­tial to increase prof­it. Indus­tries must under­stand the require­ments for Mus­lim mar­kets in pro­duc­ing prod­ucts purposes.

Literature Review

Ngah et al. showed that cus­tomers pres­sure, orga­ni­za­tion­al readi­ness, and per­ceived ben­e­fits were influ­ence by inten­tion to adopt halal ware­hous­ing ser­vices [4]. Those fac­tors were rec­og­nized as the dri­vers of adop­tion. The main bar­ri­er, which is cost, has been iden­ti­fied.  Besides that, Azmie et al. iden­ti­fied that halal stan­dards influ­ence the adop­tion in a per­spec­tive of Malaysia’s prac­tices where­by tech­no­log­i­cal con­text, which refer to com­pat­i­bil­i­ty and per­ceived ben­e­fits, orga­ni­za­tion­al con­text con­tained sup­port­ing man­age­ment, halal integri­ty, orga­ni­za­tion­al readi­ness, halal aware­ness, under­stand­ing prac­tices, and expect­ed busi­ness ben­e­fits [5]. Fur­ther­more, for the con­text of envi­ron­men­tal, gov­ern­ment sup­port, com­peti­tors sup­port, consumer’s pres­sure and halal mar­ket demand have been iden­ti­fied as the mar­ket orientation.

The Halal Indus­try Devel­op­ment Cor­po­ra­tion (HDC) web­site list­ed sev­en key sec­tors that form the halal indus­try, which are food ser­vices, con­sumer goods, finan­cial, phar­ma­ceu­ti­cal, cos­met­ics, halal logis­tics, and tourism. Tech­nol­o­gy, orga­ni­za­tion, and envi­ron­ment (TOE) is a com­bi­na­tion of three struc­ture groups to iden­ti­fy the adop­tion of inno­va­tions which include tech­nol­o­gy con­text, orga­ni­za­tion­al con­text, and envi­ron­men­tal con­text for the orga­ni­za­tion [6]. As for the orga­ni­za­tion­al con­text, it describes the char­ac­ter­is­tics of the orga­ni­za­tion and the envi­ron­men­tal con­text refers to the organization’s indus­try and its com­peti­tors, cus­tomers, and gov­ern­men­tal struc­tures. The key dri­ver for the halal indus­try is the increased demand for ser­vices with the abil­i­ty to sup­ply the demand. It is shown that the cur­rent sup­ply is not enough to meet the demand for 1.8 bil­lion peo­ple globally.

Based on Allied Mar­ket Research (AMR), the halal cos­met­ics mar­ket has expand­ed its prod­uct base to promi­nent­ly tap into the cos­met­ics mar­ket owing to an increase in demand for halal cos­met­ic prod­ucts world­wide, par­tic­u­lar­ly regions dom­i­nat­ed by Mus­lim pop­u­la­tion such as Malaysia, Indone­sia, Sau­di Ara­bia, and UAE. These fac­tors are ris­ing demand for halal cos­met­ics, which result­ed in an increas­ing halal cos­met­ics mar­ket size by 2022. The glob­al halal cos­met­ics mar­ket is seg­ment­ed based on prod­uct type, appli­ca­tion, dis­tri­b­u­tion chan­nel, and geog­ra­phy. For the prod­uct type, it is seg­ment­ed of per­son­al care prod­ucts, col­or cos­met­ics, and fra­grances, while the appli­ca­tion includes hair care, skin­care, face care, and beau­ty care. Next, halal cos­met­ics mar­ket dis­trib­ute the prod­ucts by offline and online chan­nel and geo­graph­i­cal­ly in North Amer­i­ca, Europe, Asia-Pacif­ic, and LAMEA.

Sug­ibayashi stat­ed com­put­ed that halal cos­met­ic prod­ucts must not con­tain ingre­di­ents derived from pig, car­rion, blood, human body parts, preda­to­ry ani­mals, rep­tiles, and insects, among oth­ers [7]. In the prepa­ra­tion, pro­cess­ing, man­u­fac­ture, stor­age, and trans­port of halal cos­met­ic prod­ucts, main­te­nance of hygiene and pure con­di­tions must be always ensured. There is an empha­sis on the absence of filth. Hence, halal cos­met­ic prod­ucts bear­ing the halal logo must be rec­og­nized as an indi­ca­tor of clean­li­ness, safe­ty, puri­ty, and quality.

Method

The researchers adopt­ed a quan­ti­ta­tive method.  A ran­dom sam­pling method was select­ed. A ques­tion­naire was used as the data col­lec­tion instru­ment. There were two sec­tions which include sec­tion A, the respon­dents’ pro­file and sec­tion B, the influ­enc­ing fac­tors of choos­ing halal cos­met­ics among cos­met­ics entre­pre­neurs.  Sec­tion A has 7 items which were gen­der, age, race, sta­tus, and involve­ment in the cos­met­ic indus­try and income per month, while sec­tion B con­sist­ed of ques­tions relat­ed to the influ­enc­ing fac­tors in choos­ing halal cos­met­ics among the cos­met­ics entre­pre­neurs.  Respon­dents were asked to indi­cate their per­cep­tions and agree­ment towards the state­ments in the ques­tion­naires by using five-point Lik­ert Scale answers. The sam­ple was 250 respon­dents around Selan­gor who were the entre­pre­neurs of halal cos­met­ics who used social media as the medi­um of promotion.

Results and Discussion

The total num­ber of respon­dents was 250.  It is found that 26.8% of them are male while the remain­ing 73.2% are female. Most of 53.2% of the respon­dents which was in the range of 18–25 years old and above, fol­lowed by 26–33 years old with a per­cent­age of 28.4%, 34–40 years old with a per­cent­age of 14.8%, while the remain­ing of 3.6% was above 40 years old. The respon­dents were 86.4% of Malay, 3.2% from Indi­an, 4.0% Chi­nese, and the remain­ing is 6.4% from inter­na­tion­al respon­dents. 47.6% of respon­dents have been oper­at­ed their busi­ness for less than one year, 46.8% is between one to five years, 2.8% is between five to ten years, and the remain­ing 2.8% is more than 10 years of oper­a­tion.  % Of respon­dents have heard about Halal cos­met­ics before. 24.4% of them have had the infor­ma­tion through news­pa­pers or mag­a­zines, 27.2% was on tele­vi­sion or radio, 4.8% was through gov­ern­ment pub­li­ca­tions, and 43.6% are from oth­ers. The sum­ma­ry of the respon­dents’ back­ground is in Table 1. Based on the find­ings, it is appar­ent that halal cos­met­ic aware­ness is very high. How­ev­er, there is more to do by the gov­ern­ment to pro­mote halal cos­met­ics among consumers.

Table 1. Respon­dents’ Background

Item	Per­cent­age	Item	Per­cent­age
Gen­der:		Year of operation:
Male	26.8%	<1	47.6%
Female	73.2%	1–5	46.8%
		5–10	2.8%
		>10	2.8%
Age Group:
18–25	53.2%	Heard of halal:
26–33	28.4%	Yes	90%
34–40	14.8%	No	10%
>40	3.6%
		Chan­nel heard of halal:
Race:		Newspaper/​	24.4%
Malay	86.4%	Mag­a­zines
Indi­an	3.2%	Television/​radio	27.2%
Chi­nese	4.0%	Gov­ern­ment publications	4.8%
Inter­na­tion­al	6.4%	Oth­ers	43.6%

Based on Table 2, the mean for com­pat­i­bil­i­ty was 3.98 ± 0.768, per­ceived ben­e­fits was 3.952 ± 0.779, man­age­ment sup­port was 4.004 ± 0.763, orga­ni­za­tion­al readi­ness was 4.048 ± 0.742, under­stand­ing prac­tices was 4.116 ± 0.810, expect­ed busi­ness ben­e­fits was 4.048 ± 0.867, aware­ness was 3.940 ± 0.836, halal integri­ty was 4.000 ± 0.801, gov­ern­ment sup­port was 4.024 ± 0.801, com­peti­tors pres­sure was 3.952 ± 0.790, con­sumers pres­sure was 4.044 ± 0.729 and halal mar­ket demand was 4.104 ± 0.774.

Under­stand­ing prac­tices was the main fac­tor that influ­ences choos­ing halal cos­met­ics among cos­met­ics entre­pre­neurs. The find­ing is con­sis­tent with what has been found by Ruže­vičius [8].  He indi­cates that con­sumers of the non-Mus­lim coun­try con­sid­er halal prod­ucts as healthy and safe to be con­sumed how­ev­er the major­i­ty acquires more infor­ma­tion on the qual­i­ty of the Halal prod­ucts. Con­se­quent­ly, an under­stand­ing of the enablers and the bar­ri­ers is essen­tial to under­stand the actu­al sit­u­a­tion which occurs in the halal indus­try and ulti­mate­ly pro­vide infor­ma­tion about the indus­try to the gov­ern­ment [4]. 

Table 2. Descrip­tive sta­tis­tics on influ­enc­ing fac­tors in choos­ing halal cos­met­ics among cos­met­ics entrepreneurs.

Fac­tors	Mean
Com­pat­i­bil­i­ty	3.980 ± 0.768
Per­ceive benefits	3.952 ± 0.779
Man­age­ment support	4.004 ± 0.763
Orga­ni­za­tion­al readiness	4.048 ± 0.768
Under­stand­ing practices	4.116 ± 0.810
Expect­ed busi­ness benefits	4.048 ± 0.868
Aware­ness	3.940 ± 0.836
Halal integri­ty	4.000 ± 0.801
Gov­ern­ment support	4.024 ± 0.801
Competitor’s pres­sure	3.952 ± 0.790
Consumer’s pres­sure	4.044 ± 0.729
Halal mar­ket demand	4.104 ± 0.774

Conclusions

This ini­tial study has indi­cat­ed two essen­tial find­ings relat­ed to halal cos­met­ics: 1) The aware­ness among young halal cos­met­ics entre­pre­neurs is very high, 2) There is also high con­sump­tions of halal cos­met­ics among con­sumers that become the push fac­tor of young cos­met­ic entre­pre­neurs to choose halal cos­met­ics as their products.

References

[1]   B. Badruldin et al., “Clients’ per­cep­tion towards JAKIM ser­vice qual­i­ty in Halal cer­ti­fi­ca­tion,” J. Islam. Mark., vol. 3, no. 1, pp. 59–71, 2012.

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[3]   S. Lada, G. H. Tanakin­jal, and H. Amin, “Pre­dict­ing inten­tion to choose halal prod­ucts using the­o­ry of rea­soned action,” Int. J. Islam. Mid­dle East. Financ. Man­ag., vol. 2, no. 1, pp. 66–76, 2009.

[4]   A. H. Ngah, Y. Zain­ud­din, and R. Thurasamy, “Adop­tion of halal sup­ply chain among Malaysian halal man­u­fac­tur­ers: An explorato­ry study,” Pro­ce­dia-Social Behav. Sci., vol. 129, no. 2014, pp. 388–395, 2014.

[5]   F. R. Azmi, H. Musa, H. Sihomb­ing, and F. S. Fen, “Adop­tion fac­tors of halal stan­dards: The Malaysian per­spec­tives,” in Pro­ceed­ings of the 3rd Inter­na­tion­al Halal Con­fer­ence (INHAC 2016), 2018, pp. 315–329.

[6]   T. Oliveira and M. Fra­ga, “Lit­er­a­ture review of infor­ma­tion tech­nol­o­gy adop­tion mod­els at firm lev­el,” Cos­met­ics, vol. 14, no. 1, pp. 110–121, 2011.

[7]   K. Sug­ibayashi et al., “Halal cos­met­ics: A review on ingre­di­ents, pro­duc­tion, and test­ing meth­ods,” Cos­met­ics, vol. 6, no. 3, p. 37, 2019.

[8]   J. Ruže­vičius, “Prod­ucts qual­i­ty reli­gious-eth­ni­cal require­ments and cer­ti­fi­ca­tion,” Econ. Man­ag., vol. 17, no. 2, pp. 761–767, 2012.

Corresponding author biography

Ali­na Sham­sud­din obtained her Ph.D. from the Uni­ver­si­ty of Strath­clyde in 2007. Cur­rent­ly, she is an Asso­ciate Pro­fes­sor at the Fac­ul­ty of Tech­nol­o­gy Man­age­ment and Busi­ness, Uni­ver­si­ti Tun Hus­sein Onn Malaysia (UTHM). Her cur­rent research inter­est includes out­come-based edu­ca­tion (OBE), tech­no­log­i­cal capa­bil­i­ty- inno­va­tion, and insti­tu­tion high­er learn­ing leadership.

Copyright

© 2021 by the authors. This is an open access arti­cle dis­trib­uted under the Cre­ative Com­mons Attri­bu­tion License, which per­mits unre­strict­ed use, dis­tri­b­u­tion, and repro­duc­tion in any medi­um, pro­vid­ed the orig­i­nal work is prop­er­ly cited.