Blockchain-Empowered Halal Fashion Traceability System in Indonesia

Blockchain-Empowered Halal Fashion Traceability System in Indonesia

Eli Sumarliah, Tieke Li, Bailin Wang, Fauziyah Fauziyah, Indriya Indriya
DOI: 10.4018/IJISSCM.287628
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Abstract

Incorporating blockchain into Halal traceability systems is developing in nature; the research aspires to examine the participation intent in blockchain-empowered Halal fashion traceability (BHFT) system via a joint framework that includes diffusion of innovation theory, institutional theory, and Halal-oriented approach. The study uses a simple random sampling method to collect the data from 165 Indonesian Halal fashion manufacturing companies. PLS-SEM is employed to examine the conceptual framework. Findings show that Halal-oriented approach significantly affects institutional pressures, while institutional pressures significantly affects perceived desirability, and perceived desirability significantly affects the participation intent. The companies operating an inclusive Halal-oriented approach will be more aware of the institutional pressures that expect them to partake in a BHFT. The paper enhances the existing literature in Halal supply chains, blockchain, operation management, and information systems via a cohesive framework and empirical insight.
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Introduction

Halal ethics are set in Muslims’ everyday practices and behaviors (Ab Talib et al., 2016). For example, regarding food and drinks, Muslims abide by the Islamic dietary rules (Poniman et al., 2015), which require all Muslims only to consume the permitted (i.e., Halal) food and drinks, not the prohibited ones (van der Spiegel et al., 2012). Similarly, in the context of clothing, Muslims are only permitted to select fashion products that fulfill the Islamic dress code –a Sharia law that regulates all Muslims regarding which types of clothing are permissible (i.e., Halal) or forbidden (i.e., Haram) to wear (Sumarliah, 2021; Sumarliah et al., 2021a, 2021b). “Halal,” an Arabic term signifying “legal” or “lawful,” is a sacred duty that must be observed by every Muslim irrespective of their Islamic teachings or groups (Sumarliah et al., 2020).

In 2018, global Muslims’ spending for Halal fashion products (i.e., footwear and apparel) had reached 283 billion USD, and it is estimated to reach 402 billion USD in 2024 (Dinar Standard, 2019). Thus, halal fashion has become a significant international market sector with continuously expanding market volume since twenty-four percent of the global population are Muslims (Sumarliah, 2021). Furthermore, as Muslim customers are obligated to choose only Halal products for daily consumption, non-Muslim customers can decide to buy Halal products because they consider Halal products are more hygienic in preparation and processing (Poniman et al., 2015). Thus, producers of Halal goods (including fashion goods) can enter the untouched Muslim marketplaces as upholding the current non-Muslim marketplaces when they can fulfill Halal ethics in their manufacturing activities. Presently, that Halal fashion goods are not only manufactured by local companies in Muslim-majority nations but also interestingly produced by the well-known global brands as the main actors, e.g., Chanel, Zara, Dolce and Gabbana, Oscar de la Renta, and Tommy Hilfiger, as reported by the 2020 Market Watch (Sumarliah, 2021).

To guarantee Muslim customers that the goods are Halal, Halal-certifying bodies that publish the Halal certificates must assess producers’ activities from the early phase of the supply chain until the end (Sumarliah, 2021). This assessment should be conducted from procuring raw Halal materials/ingredients, manufacturing process, packing, handling, storing, retailing, and shipping until the products reach final customers (Sumarliah et al., 2021a; 2021b). In addition, halal-certifying bodies must confirm that all supply chain activities performed by manufacturers follow Sharia (Islamic) standards. Subsequently, a Halal certificate can be issued; it is generally exhibited on the product label as a logo (van der Spiegel et al., 2012).

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