Motives and Challenges of Small Businesses for Halal Certification: The Case of Indonesia

The demand for halal certified products, especially for food and beverages in a country with majority Muslim customers, has increased significantly. This phenomenon shows an increasing awareness for halal products. However, only a limited number of studies examine the awareness of producers, especially small businesses, towards halal certification. Therefore, this study aims to identify the small businesses' perception of halal certification, their motives, and their challenges in certifying their products. The data is obtained by conducting a focus group discussion with small businesses operating in the Greater Jakarta Area and confirmed via an in-depth interview with the officer in charge of the certification administration. Results from the study reveal that most of the small businesses recognize the importance of halal certification to their businesses. The results also reveal that among the most important motives for the decision to get the halal certification is to increase sales or profits, to expand the market, to offer security in consuming the products, and self-awareness of the business owner. Conversely, this study also finds that the challenging factors in obtaining halal certification include different procedures and costs of applying halal certification in different provinces and the lack of standardization of information provided by different institutions. Furthermore, this study finds that the implementation of halal certification procedures and related costs depend on the policy at the district level