*Corresponding Author P-ISSN: 1412-1212 E-ISSN: 2541-2388 7 The Winners, 21(1), March 2020, 7-13 DOI: 10.21512/tw.v21i1.5873 Factors Impacting Customer Attitude toward Buying Halal Cosmetics in Jabodetabek Ni Made Adelia Clarita1*; Shannon Baladewa Zimbalist2; Rini Setiowati3 1,2,3Business Management Program, Management Department, BINUS Business School Master Program, Universitas Bina Nusantara Jl. Kebon Jeruk Raya No. 27, Kebon Jeruk, Jakarta 11530, Indonesia 1claritaadelia29@gmail.com; 2shannonbaladewazimbalist@gmail.com; 3rsetiowati@binus.edu Received: 22nd August 2019/ Revised: 06th September 2019/ Accepted: 19th September 2019 How to Cite: Clarita, N. M. A., Zimbalist, S. B., & Setiowati, R. (2020). Factors impacting customer attitude toward buying halal cosmetics in Jabodetabek. The Winners, 21(1), 7-13. https://doi.org/10.21512/tw.v21i1.5873 Abstract - The research aimed to analyze the relationship between religiosity, product involvement, customers’ knowledge toward customers’ attitudes on halal cosmetics, and the relationship between customers’ attitudes on halal cosmetics towards customers’ intention to buy them. The research used a self – administrated questionnaire with close-ended questions. The questionnaire was distributed as pretest to 30 respondents offline. Furthermore, the researchers received answers from 302 respondents out of 350 that were distributed. To assess the relationship between knowledge, involvement, and religiosity, a structural equation modeling technique was used. Data were analyzed using Smart PLS software to test validity and reliability. The findings its show that there is a positive relationship between knowledge, religiosity, and product involvement towards costumers’ attitudes of halal cosmetics on Indonesian Muslim women. Moreover, the results indicate that Muslim women in Indonesia have more positive attitudes and intentions towards halal cosmetic products. The results of the research give implications to the firm in competing for the general and international brands for the halal cosmetic industry. Keywords: customer attitude, halal cosmetics, purchase intention I. INTRODUCTION The cosmetics industry is one of the major role players in the global industry. The global cosmetic product market was valued at USD532,43 billion in 2017 and is expected to reach a market value of USD805,61 billion by 2023, registering a CAGR of 7,14% during 2018-2023 (Orbis research). Today, women feel more confident and brave after applying cosmetics; for them, cosmetics gives indirect encouragement. Women express a more positive body image and self-image when wearing makeup compared to when they are not wearing makeup (Cash & Cash, 1982). Indonesia has the largest Muslim population, with approximately 266,7 million Muslims or 88% of its total population, and in South East Asia’s biggest economy. The number of female populations in Indonesia is 131,9 million out of a total of 266,7 million populations. The value of the Indonesian cosmetic industry, according to the Ministry of Industry and the sales growth of the cosmetic industry contributes around USD 1,4 billion. Indonesia becomes a sleeping giant who is waking up pretty quickly now. Muslim consumers are faced with a wide selection of products and services that are provided in stores, including those of halal and non-halal products (Suki & Suki, 2018). The halal cosmetics industries are gaining the attention of the world now because Muslims feel peace by consuming halal products in every part of their life (Ali, Halim, & Ahmad, 2016). The aspects of ‘halalness’ knowledge of the products are essential during decision making, either to accept or reject a product (Ireland & Rajabzadeh, 2011). The laws affecting Muslims consumption behavior are governed by the Quranic philosophy of what is permissible (halal) and what is not permissible (haram) for a believer (Eliasi & Dwyer, 2002). There are two categorize of Islam in Indonesia, those are modernism and traditionalism. Modernism is the one who keeps up with modern and following the trend. Meanwhile, traditionalism is the one who keeps up with the norms and culture. According to the Ministry of Industry, the value of the Indonesian cosmetic industry, and the sales growth of the cosmetic industry contribute around USD1,4 billion. During these past few years, a growing trend in the use of Halal cosmetics is increasing in Indonesia. The halal 8 The Winners, Vol. 21 No. 1 March 2020, 7-13 cosmetics industry has a chance to rise in Indonesia as Muslim women begin to develop an awareness of the halal product. Table 1 shows the popular cosmetics brand in Indonesia in 2015. Table 1 Popular Cosmetics Brand in Indonesia 2015 No Brand Popularity (%) 1. Wardah 37,80 2. Pixy 10,10 3. Sari Ayu 8,70 4. Viva 6,60 5. Pond’s 6,60 6. Latulip 3,90 7. Oriflame 3,60 8. Maybeline 3,30 9. Revlon 2,90 10. Mustika Ratu 1,90 International Trade Administration (www.trade. gov/industry) says that Indonesia has given the massive population of over 250 million and rising incomes; analysts predict that Indonesia in the next 10 to 15 years will rise to the top of the Asian markets for cosmetics. So, it believes that the cosmetic industry will increase in the profit, including the GDP. There are three local cosmetic industries that have halal certification, which are Wardah, Sari Ayu, and Mustika Ratu. Wardah is known as the first halal cosmetics product that then becomes the leader of the cosmetic brand in Indonesia and has consistently recorded a 20%-50% annual sales increase (Table 1). It is disproportionately higher than the other manufacturers at around 10%. This is proof from Wardah that they have successfully capitalized and become a market leader cosmetics brand in Indonesia. Global Business Guide Indonesia has been doing surveys, and the result shows that 58% of Muslim women in Indonesia now choose Halal cosmetics over others. It is because a significant number of working Muslim women have now generated more income and therefore are more conscious of halal products. The other 42% of women choose another product, which is not halal cosmetics. It becomes the question of what factors and why the other 42% of Muslim women do not have the intention to purchase or using halal cosmetics. In Arabic, the word ‘halal’ means permissible or lawful, while its antonym is ‘haram’ that means prohibited or unlawful (Alam & Sayuti, 2011). Halal refers to something permissible or allowable in Islam, as stated in the Quran, where everything in this world is halal unless something shows otherwise (Alam & Sayuti, 2011). In the previous research conducted by Rahman, Asrarhaghighi, and Rahman (2015) using Theory of Reasoned Actions (TRA), it is found that there is a significant positive relationship between religiosity and attitude of Muslims in Malaysia towards halal cosmetics. Purchase intention in young women using Theory Planned Behavior (TPB) has found that it creates halal awareness, and they will pursue products that do not only meet their needs and preferences but also give them peace and much less worry when they consume the products (Hashim & Musa, 2014). In the research, the researchers show if there is a positive relationship between religiosity, knowledge and product involvement, and attitude towards purchase intention in buying halal cosmetics. This research provides an insight into the Indonesian cosmetic industry on what factors attracts new customers with no experience of halal cosmetics. The information allows companies to create a marketing strategy for the broader market to promote their product so that they are able to increase their sales since Indonesia is the largest Muslim-populated country. Since the research about halal cosmetics is scarce, this research can also be used by future researchers to develop more inputs on halal cosmetics in Indonesia as research on halal products. TRA is the most relevant theoretical model in the context of a halal product as it explicitly embeds subjective norms in the attitude formation process (Ajzen & Fishbein, 1980). The theory postulates that intention, as the direct precursor to behavior, is derived by the individual’s attitude and the subjective norms (Andrews & Netemeyer, 1993). Amin (2013) has extended the use of TRA within the context of halal service through the examination of customer preference towards Islamic credit cards. Mukhtar and Butt (2012) have stated that the TRA is a valid model for predicting intention to choose halal products. Religious commitments play a critical role in people’s lives through the establishment of beliefs, knowledge, and attitude (Ireland & Rajabzadeh, 2011). Religiosity is the extent to which an individual is committed to his/her religion, where it is then imitated in his/her attitude and behavior (Rahman, Asrarhaghighi, & Rahman, 2015). They have found that there is a significant positive relationship between religiosity and attitude towards halal cosmetics. Another previous research has found that there is a positive and significant relationship between religiosity and attitude towards Indian halal brands (Garg & Joshi, 2018). When it comes to Muslim consumers, religion occupies a significant part as it facilitates them to distinguish between the permissible and the prohibited (Rehman & Shabbir, 2010). The overall decision-making process, starting from selecting the product to making purchases and eventually its consumption, extensively relies on individuals’ degree of commitment toward their respective religion (Khraim, 2010). Previous research has found that the relationship between religiosity and attitude towards halal cosmetics among women in Surabaya is positive (Balques, Noer, & Nuzulfah, 2017). The research investigates the relationship between religiosity and attitudes towards cosmetics 9Factors Impacting Customer Attitude ..... (Ni Made Adelia Clarita, et al.) products in Indonesia, and since the consumer nowadays has become more concerned with the halal status of the product that they consume and use. This research tests the relationship between religiosity and attitude towards halal cosmetic products that are focusing on halal cosmetics. H1: There is a positive relationship between religiosity and attitude towards halal cosmetics products. Yousaf and Malik (2013) discussed on influences of religiosity and product involvement level on the consumers. It is found that a positive result and product involvement affect attitudes on how they decide to purchase a product. It is empirically proven that product involvement is positively associated with brand perception and preference (Dholakia, 2003). Hashim and Musa (2014) said that the manufacturers, producers, and marketers should not only think about increasing the return but also understanding the essentials groundings about the halal concept to encourage them to produce innovative products that are genuinely halal. Their research result proves that product involvement has a positive impact on attitude towards halal cosmetics. Hashim and Musa (2014) found from non-users or users of halal cosmetics that product involvement has a positive relationship with the attitude towards halal cosmetics. When a product is perceived as high involvement, consumers will engage in a more active information search and will consider a greater variety of alternatives in their decision-making (Kwon, Lee, & Kwon, 2008). Azreen in Hashim and Musa (2014) found the relationship from non-user or user halal cosmetics, that product involvement has a positive attitude towards halal cosmetics. H2: There is a positive relationship between product involvement and attitude towards halal cosmetic products. There is a weak relationship between knowledge and attitude (Rahman, Asrarhaghighi, & Rahman, 2015). Knowledge is influenced by the level of understanding that is gained from information that reveals more details about halal products (Rahman, Asrarhaghighi, & Rahman, 2015). Consumers have sound knowledge on the concept of halal, but they still have low awareness regarding the halal certification and halal label (Rajagopal et al., 2011). However, another previous research has found that there is a positive relationship between knowledge and attitude. All of those researches are in the cosmetic industry (Briliana & Mursito, 2017). H3: There is a positive relationship between knowledge and attitude towards halal cosmetic products. Attitude is the stands for a person’s general feeling of favorableness or un-favorableness toward a concept; in other words, it represents the amount of effect (Hill, Fishbein, & Ajzen, 1977). Attitude also relates to an individual’s judgment and perceived consequences, whether the act on a specific behavior is good or bad (Untaru et al., 2016). Rosenberg (1956) has defined attitudes as a combination of beliefs and feelings about an object, either blocking or facilitating an individual’s attempts to attain valued states. According to Agarwal and Malhotra (2005), an attitude is a summary evaluation of an object or thought, and it is the effect for or against a psychological object. According to TRA, consumer attitudes have a positive impact on their intention to buy a product (Madden, Ellen, & Ajzen, 1992). Rahman, Asrarhaghighi, and Rahman (2015) found that the positive relationship between consumer attitudes and intentions regarding halal cosmetics products. Azreen and Rishida in Hashim and Musa (2014) have investigated purchase intention in young. It women using Theory Planned Behaviour (TPB) shows that creates halal awareness and they purchase intention pursue products that not only meet their needs and preferences but also give them peace and not worried when consuming the products. Moreover, attitude can be further classified into two different categories, which are attitude towards object and attitude towards behavior (Fazio, 1990). A relationship between attitude and purchase intention towards the halal brand in India is significant and positive (Garg & Joshi, 2018). Another previous research has found that the more positive the customers’ attitude, the more positive their purchase intention of halal cosmetics (Balques, Noer, & Nuzulfah, 2017). Figure 1 shows the framework of this research. H4: There is a positive relationship between attitudes and intentions towards halal cosmetic products. Figure 1 Research Framework II. METHODS The questionnaires are distributed using non- probability convenience sampling. The researchers have distributed 350 questionnaires, both online and offline. The samples are Muslim women who use or do not use halal cosmetics. The area for sampling is limited only to Jakarta, Bogor, Depok, Tangerang, Bekasi (Jabodetabek). This research uses a self-administrated 10 The Winners, Vol. 21 No. 1 March 2020, 7-13 questionnaire with closed-ended questions. Section A of the two-section questionnaire covers socio- demographic characteristics of the respondents, such as gender, age, income, buying halal cosmetics, and others. Section B of the questionnaire encloses twenty measurement items, which are measured on five-point Likert scales stretching from 1 (strongly disagree) to 5 (strongly agree). The researchers use five-point Likert scales to measure consumer intention. Measure on religiosity, product involvement, product image, attitude, and intention is adapted from previous research by Alam and Sayuti (2011) which comprises of five-point Likert scale ranging from one (strongly disagree) to five (strongly agree). Previous research also uses five-point Likert scales (Rahman, Asrarhaghighi, & Rahman, 2015). The type of data in this research is primary quantitative data. The quantitative data use comes from the results of the questionnaire. Before distributing the questionnaire, the researchers have carried out a trial. The trials are conducted through pretests that have been translated from English to Indonesian and Indonesian to English. The respondents from the pretest are those who complied with the requirements to fill out questionnaires based on screening questions. A pretest itself serves as feedback and comments about the language used in this research, as well as showing the validity and reliability of the survey. Feedback and comments are used to more significantly improve and adjust the language compatibility in this research. Pretests are distributed to 30 respondents in various locations offline. There are not much feedback and comments on the pretest, where there are no significant changes made to the questionnaire for further investigation of validity and reliability. After doing a pretest, the researchers spread the online questionnaire through broadcasting using an online media google form to Muslim women who live in Jabodetabek. The amount of people who live in Jabodetabek is 7.604.000 people. At the same time, the total respondents are 350, so it represents 21% of the total population in Indonesia. The researchers use PLS-SEM (Partial Least Squares) analysis that consists of two stages. Firstly, observed variables are combined as weighted sums (composites). Secondly, the composites are used in separate regression analyses, applying null hypothesis significance testing by comparing the ratio of a regression coefficient and its bootstrapped standard error against the authors’ distribution. The data are analyzed using smart PLS Software to test validity through the research variable that is valid if the value of outer loading is above 0,70 and the Average Variance Extracted (AVE) is above 0,5. Reliability testing is seen from values composite reliability. The research variable is reliable if the value represents composite reliability is above 0,70. Discriminant Validity test is seen from the values of Cross Loading and Fornell- Larcker. This is completed by comparing the square root of AVE for each variable with the correlation between variables and other variables in the model. For the pretest, the data are analyzed using SPSS software to determine validity and reliability. Cronbach alpha is used to validate the consistency of the measurement used in the questionnaire. In contrast, Confirmatory Factor Analysis (CFA) is used to identify the degree of construct validity. CFA focuses on the Kaister Meyer Olkin (KMO) to measure the sampling and component matrix. III. RESULTS AND DISCUSSIONS Before distributing the questionnaire, the researchers have carried out a pre-test. Pre-tests are distributed offline to 30 respondents in various locations. The pre-test does not generate many feedback and comments. Based on the SPSS result, the researchers have removed five items that are not valid and not reliable. According to the data collected from 302 respondents, there are 152 (50,34%) respondents who do not use halal cosmetics, while 150 (49,66%) of them are halal cosmetics users. The age group of the largest respondents is 18-25 consisting of 248 respondents (82,11%). The majority of respondents amounted to 115 (38,07%), are located in Jakarta. More than half of the respondents are students with 214 (70,86%) respondents. The majority of income is Rp2.000.000,00 - Rp4.000.000,00 with 135 (44,7%) respondents. Based on the collected data, out of 302 respondents, 161 (53,21%) buy make-up for a month. The majority, consisting of 99 (32,78%) respondents, chose to buy make-up online. From the total 24 items, there are 22 valid items. By removing one item from the variable of customer attitude and one item from religiosity, all of the variables are considered valid and reliable. Table 2 shows the validation and reliability, while Table 3 shows the discriminant validity. The factor loading ranges from 0,708 to 0,860, the value of AVE ranges from 0,553 to 0,648, and composite reliability values ranges from 0,832 to 0,893. Therefore, all variables meet the criteria of discriminant validity with the range of 0,744 to 0,805. Tbale 4 shows p-value. The result implies that H1 is accepted with sig. value of 0,000 and that religiosity is related to attitude. These results are in accordance with the findings of Rahman, Asrarhaghighi, and Rahman (2015) that says, there is a significant positive relationship between religiosity and customer attitude in halal cosmetics. Hypotheses testing for H2 is accepted, which indicates that product involvement affecting attitude with a significant value of 0,000. Product involvement has a significant positive attitude to halal cosmetics (Hashim & Musa, 2014). The next hypotheses, H3 that has stated halal knowledge has an impact on the customer’s attitude with a significant value of 0,003, which is lower than 0,05. This result does not correspond with Rahman, Asrarhaghighi, and Rahman (2015), who has stated that there is no significant relationship between knowledge and customer attitude. According to TRA, customer attitude has a positive impact on 11Factors Impacting Customer Attitude ..... (Ni Made Adelia Clarita, et al.) Table 2 Mean, Validation and Reliability No Construct / Item Mean Factor Loading > 0,7 Composite Reability > 0,7 AVE > 0,5 1 Religiosity 0,846 0,648 R1 0,787 R2 0,860 R3 0,766 2 Product Involvement 0,839 0,565 PIn 1 0,729 PIn 2 0,822 PIn 3 0,735 PIn 4 0,712 PIn 5 0,783 3 Halal Knowledge 0,832 0,553 HK 1 0,719 HK 2 0,787 HK 3 0,750 HK 4 0,716 4 Customer Attitude 0,893 0,627 CA 1 0,793 CA 2 0,821 CA 3 0,840 CA 4 0,708 CA 5 0,792 5 Purchase Intention 0,870 0,574 PI 1 0,729 PI 2 0,822 PI3 0,735 PI 4 0,712 P I 5 0,783 Table 3 Discriminant Validity No CA HK PI PIN R 1 CA 0,792 2 HK 0,534 0,744 3 PI 0,670 0,605 0,757 4 PIN 0,648 0,501 0,498 0,752 5 R 0,691 0,493 0,546 0,656 0,805 Table 4 P-Value No Hypothesis Path Path Coef T-Value P-Value Conclusion 1 H1 R > CA 0,412 6,803 0,000 Supported 2 H2 PIN > CA 0,238 4,366 0,000 Supported 3 H3 HK > CA 0,187 3,010 0,000 Supported 4 H4 CA > PI 0,670 9,508 0,000 Supported 12 The Winners, Vol. 21 No. 1 March 2020, 7-13 the intention to order products (Madden, Ellen, & Ajzen, 1992). This indicates that Muslim women in Indonesia, especially in the Jabodetabek area who choose halal cosmetics, have more knowledge enough to distinguish between things that are permitted and prohibited. In this research, the H4 stating that customer attitude has an impact on purchase intention is accepted with sig. value of 0,000. Previous research has also found a relationship between attitude and purchase intention towards the halal brand in India is significant and positive (Garg & Joshi, 2018). The research delivers some practical implications. It conveys a strong message to cosmetic companies, particularly the producers, retailers, and distributors of cosmetic products, concerning the need to foster better knowledge among consumers regarding halal cosmetic product consumption. According to Global Business Guide (2017), halal cosmetics is on rising demands in Indonesian customers. As of September 2017, the Indonesia National Agency of Drug & Food Control (BPOM RI) has reported that there are 33.823 registered cosmetic products sold in the country. This is an increase of 11,57% of the same period during the previous year. In 2017, the market size of the Indonesian cosmetic industries reached Rp46,4 trillion. This provides huge market products and turns the assessment of the relationship between consumer attitudes towards and intention to choose halal products an interesting subject for many researchers. According to a global market research company, Euromonitor International, Indonesia has the largest number of middle-class households in ASEAN (Hananto, 2018). This could be proven by the majority net income of the respondents, which range from Rp2.000.001,00 to 4.000.000,00. A lot of previous studies have only focused on halal food, while researches on halal cosmetics are still rarely found. The limitation of the previous research is that they assess the influence of knowledge to consumer attitudes towards halal products (Rahman, Asrarhaghighi, & Rahman, 2015). Their results correspond with this research, indicating that there is a weak relationship between knowledge to attitude for non-user of halal cosmetics. IV. CONCLUSIONS By using TRA, the research explores the relationship between consumer attitudes and intention to choose halal cosmetics products. The finding of this research indicates that all of the hypotheses are accepted among the users of halal cosmetics in Jabodetabek (Jakarta, Bogor, Depok, Tangerang, Bekasi), but one hypothesis is rejected among non-users of halal cosmetics. Knowledge of attitudes is rejected among non-users due to their lack of knowledge of halal products. Meanwhile, product involvement and religiosity have a positive relationship to the customer attitudes for them and cause them to have the intention to purchase halal cosmetics or re-purchased halal cosmetics. Since one of the symbols of a woman’s beauty is cosmetics, they are normally associated with women because of their nature to always look and feel beautiful. Muslim women use cosmetics not only to enhance their features but also to project an image of poise and confidence. Therefore, the researchers hope market research in general and international brands in particular to conduct campaigns focusing on creating awareness regarding compliance with halal products. It is because of Muslim women need to be extra careful in selecting the products as they have to ensure that the products they use comply with Syariah law by being halal. Gbg’s argument about halal cosmetics being on rising demands implies that the demand for halal products itself has already had its own market and gained awareness. The awareness is necessary for the brand itself to turn the customers’ understanding and concerns into the intention to buy halal cosmetics. Although this research has generated a new understanding and appeared to be useful to the practitioners, there are still limitations that should be taken into consideration. First, the questionnaires are only distributed in Jabodetabek that do not specify certain halal cosmetic brand in Indonesia. Thus, future research is expected to investigate the relationship between religiosity, knowledge, product involvement, attitude, and intentions towards the halal cosmetic product with a specific brand, such as Wardah. This will help researchers achieve a holistic and better view from the customer about the halal brand itself. 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