Do consumers need halal label? Evidence from small and medium enterprises segment in a major Muslim environment

Abstract

Purpose This present study aims to investigate the mediating effect of halal label perceived importance (HPI) on buying intention (BI) of small and medium enterprises (SME) food products in a Muslim-majority environment by involving attitude (ATT), subjective norms (SN) and perceived behavioral control (PBC) as the antecedents. Design/methodology/approach A self-administered survey was conducted with 437 Muslim respondents who shop at an SME shopping center. Subsequently, the structural equation modeling technique was used to test the hypotheses. Findings The findings showed that ATT and PBC significantly influence the BI of halal-labeled food products. On the other hand, HPI partially mediates the relationship between ATT, PBC and BI. Practical implications The results provided insights that SME actors will be benefited from selling halal-labeled products as the label amplifies Muslim consumers’ BI. Moreover, the government must intensify the halal campaign to strengthen public awareness and social pressure on purchasing halal-labeled brands. Social implications As SMEs are the major contributor to the national economy, this sector’s business growth will benefit the Indonesian people. Moreover, as the most Muslim-populated country, halal product development will contribute significantly to the whole national economy. Originality/value This study provides empirical evidence on the halal labeling mediation role in the relationship between consumer motivation and halal buying intention in a major Muslim setting.