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Country of Origin, Religiosity and Halal Awareness: a Case Study of Purchase Intention of Korean Food

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Country of Origin, Religiosity and Halal Awareness: a Case Study of Purchase Intention of Korean Food Yuni ASTUTI, Daru ASIH / Journal of Asian Finance, Economics and Business Vol 8 No 4 (2021) 0413–0421 413 Print ISSN: 2288-4637 / Online ISSN 2288-4645 doi:10.13106/jafeb.2021.vol8.no4.0413 Country of Origin, Religiosity and Halal Awareness: A Case Study of Purchase Intention of Korean Food Yuni ASTUTI1, Daru ASIH2 Received: December 15, 2020 Revised: February 21, 2021 Accepted: March 02, 2021 Abstracts This research empirically analyzed whether the foods which came from a non-Muslim majority country, such as South Korea, could play an important role in affecting the consumer intention in a predominantly Muslim country. Online survey methods were used to investigate the proposed hypothesis. 318 responses were used for further analysis. Forty-six reflective constructs were adapted from literature and designed by using a five-point Likert scale to facilitate measurement. Estimation models and structural models were examined through SEM-PLS analysis techniques using SmartPLS 3.0 application as the data processing tool. The results showed that religiosity and halal awareness had a positive and significant effect on attitude toward halal labels, including the mediating effect from consumer attitudes towards halal labels which had a positive but insignificant effect on purchase intention. Halal awareness plays an important role for Muslims in the decision- making process for purchasing food. In contrast to the initial hypothesis, the country of origin actually did not have a positive effect on attitudes towards the halal label. In a Muslim-majority country like Indonesia, findings halal food is not difficult, so this research basically is a reminder to marketers to follow those halal principles in implementing their marketing strategies. Keywords: Country of Origin, Religiosity, Halal Awareness, Attitude towards Halal Label, Purchase Intention JEL Classification Code: M21, M30, M31 1. Introduction in the world will continue to increase. The report estimates that Muslims spent US$2.2 trillion in 2018 across the food, Muslims make up a majority of the population in 49 pharmaceutical, and lifestyle sectors that are impacted by countries around the world. The Muslim population in the Islamic faith-inspired ethical consumption needs. This world continue to shows a significant growth in recent time. spending reflects a healthy 5.2% year-on-year growth and is Looking ahead, the Center estimates that by 2050 the number forecasted to reach US$3.2 trillion by 2024 at a Cumulative of Muslims worldwide will grow to 2.76 billion, or 29.7% Annual Growth Rate (“CAGR”) of 6.2%. Besides, Islamic of the world’s population (Pew Research Center, 2017). The finance assets were reported to have reached $2.5 trillion in largest Muslim country is Indonesia, where an estimated 2018 (State of the Global Islamic Economy Report, 2019). 229 million Muslims are. This is 87.2% of the Indonesian Referring to the potential numbers of this market, it is population of 263 million and about 13% of the world’s no wonder that many countries are participating in the halal population of Muslims (worldpopulationreveiw.com). In food market. According to Hamid et al. (2019), the halal line with this phenomenon, the money spent by Muslims market is growing around 25% per year, which shows that this business is profitable and its opportunity not only among Muslim majority countries but also among non-Muslim 1First Author and Corresponding Author. Postgraduate Program, Universitas Mercu Buana, Indonesia [Postal Address: Jl. Raya, countries, one of the examples is South Korea. South RT.4/RW.1, Meruya Sel., Kec. Kembangan, Jakarta, Daerah Khusus Korean culture which is widely popular lately has also made Ibukota Jakarta 11650, Indonesia] its culinary famous. There are lots of South Korean foods Email: [email protected] 2Postgraduate Program, Universitas Mercu Buana, Indonesia. which are interesting to try, including kimchi, bibimbab, bulgogi, kimbab, teokbokki, samgyetang, jajangmyeon, and © Copyright: The Author(s) This is an Open Access article distributed under the terms of the Creative Commons Attribution others. Now South Korean snacks could be easily found Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the in Indonesia and become a contemporary trend (Setyawati original work is properly cited. et al., 2019). Even though South Korean food growth is 414 Yuni ASTUTI, Daru ASIH / Journal of Asian Finance, Economics and Business Vol 8 No 4 (2021) 0413–0421 faster in Indonesia, not all restaurants serve South Korean where the consumer has developed an actual willingness food which has been labeled halal. to act toward an object or brand (Kotler & Keller, 2016). Korean food started to gain its fame in Indonesia after the Muslim consumers decide to buy products by analyzing K-Pop wave was widely consumed in this country. Facing carefully and thoroughly the processes in the chain value to the fact that the majority of Indonesians are Muslim, people minimize the risks. started to modify the ingredients of Korean food to reach the Muslim consumers are often more specific and sensitive halal standard, which was then promoted through many kinds to the products or services offered in the market as they have of media (Nadhifah et al., 2019). The popularity of Korean a good understanding of halal and high knowledge related to entertainment in Indonesia rose in the late 2000s, and it grew the consumption and purchase of halal food (Choi & Jeong, bigger in the 2010s as Korean television series and music 2019). Halal is an Arabic word that means “permissible.” In became part of the mainstream. As the so-called K-wave of terms of food, it means food that is permissible according to Korean pop culture broke on the shores of Indonesia, so did a Islamic law. By official definition, halal foods are those that taste for Korean cuisine, which has influenced the formation are free from any component that Muslims are prohibited of consumer homogeneity behavior. That is after they from consuming according to Islamic law (Shariah). Halal experienced (consumption) those Korean dramas and K-pop products refer to products that meet the syar›i requirements as popular culture, consumers have experienced certain that prevent prohibition, both in terms of substance and other emotions that tend to influence their behaviour (Nadhifah substances (Burhanuddin, 2011). et al., 2019). In this research, South Korean food was chosen as the 2.2. Religiosity object of the research. Besides the popularity of South Korean culture among Indonesians today, it also considers Religiosity is an important constituent of subcultures the differences in beliefs held between the South Korean and has been defined as the degree of commitment toward population and the Indonesian counterparts, where the most one’s religion, which can also be understood as the level of of South Korean population chooses not to have a religion confidence in religion (Mukhtar & Butt, 2012). Religiosity or have atheism belief, while around 87 % of the Indonesian shows the extent to which individuals are involved in population is Muslim. Islam has regulated the food and drink religious affairs. The influence of religion plays a crucial that can be and cannot be consumed by Muslims. Consuming role in shaping customer behavior and attitudes towards halal products is mandatory for Muslims as described in the goods and services. Religiosity is defined as a doctrine of Qur’an (Qur’an 7:157; Qur’an 5:88; Qur’an 2:168; Qur’an certain beliefs about divine power or interpreted as a person’s 2:172–173). relationship with tradition (Wong et al., 2006). Muslim Indonesia is a country with a Muslim majority, so consumers who describe themselves as religious and have finding halal food in Indonesia is not a difficult thing. high religiosity will have different consumption patterns and Especially since the pandemic of Covid-19, the public tend to consume halal products and services (Khan et al., is increasingly aware that food that is not halal or is 2019). Muslim consumers who are more religious have a unhygienically processes has great potential to cause better understanding of halal standards and halal certification diseases. The McKinsey April 2020 survey also confirmed (Musaigar, 1993). that due to Covid-19 outbreak, consumers in Indonesia Sudarsono and Nugroho (2020) determined the effect of are highly concerned about the cleanliness and hygiene religiosity, knowledge, and attitudes on consumer intention of food products. The Covid-19 pandemic would raise to consume halal food, cosmetics, and pharmaceutical the awareness of the Muslim community regarding the products in Indonesia. The result of this study indicated that importance of halal and thoyyiban in preparing and the relationship among religiosity, knowledge, and attitudes processing food for consumption. positively influenced consumer intention to consume halal food, cosmetics, and pharmaceutical products. The 2. Literature Review and study also found that religiosity had more influence on Theoretical Framework consumer intentions to consume halal food than cosmetics and pharmaceuticals products. Setyawati et al. (2019) 2.1. Purchase Intention determined the effect of religiosity, awareness of halal food, and attitude towards halal food on purchase intention by Purchase intention is the preference of the consumers to millennial generations. Based on the results of this
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