Determinants of Consumer Behavior Towards Purchase Intention of

Halal Cosmetic Product Using Structural Equation Modelling

Approach

Alfiatus Syifa

and Iwan Vanany

Department of Management Technology, Sepuluh Nopember Institute of Technology, Surabaya 60111, Indonesia

Department of Industrial Engineering, Sepuluh Nopember Institute of Technology, Surabaya 60111, Indonesia

Keywords: Halal Awareness, Halal Cosmetics, Purchase Intention, Religiosity, Theory of Planned Behavior (TPB).

Abstract: This study aims to determine consumer characteristics in purchasing intention for halal cosmetic products and

to analyse the influence of religiosity, halal awareness and Theory of Planned Behavior (TPB). The type of

research used is quantitative research, collecting data by distributing questionnaires to 242 Muslm consumers

of halal cosmetic products in Jabodetabek. Data collection is using Google Form through social media and

instant messengers. Research finding there are correlation between religiosity, halal awareness, attitude,

subjective norm, and perceived behavioral control toward purchase intention. Managerial implications can be

applied by cosmetic companies to increase consumer buying interest in halal cosmetic products. In future

studies, researchers can apply other theories to study purchase intention, such as the theory of consumption

value or the theory of innovation diffusion.

1 INTRODUCTION

In today’s global economy, halal lifestyle has become

increasingly popular. Halal means as allowed or

permissible and refers to halal based on individual

believer. Besides, this concept does not apply merely

to food and beverages, and it is also applied in

medicines, cosmetics, personal care, and finance.

Muslims are obligated to consume halal products

obtained from halal ways wherever they lived. This

lifestyle influenced by standards, values, and

principles of each people, this affects consumers'

lifestyles, which in turn affect consumer decision-

making behavior.

According to World Population Review (2021),

the world Muslim population is growing, from 1.9

billion in 2021 and projected to be 3 billion devotees

or around 31.1% of the world’s population in 2050.

This number is the biggest increment, which is up to

6.8%. This fact shows that Indonesia is the largest

Muslim country in the world with a Muslim

population of 237 million people.

Indonesia is home to the world’s largest domestic

halal economy market, driven by the largest global

Muslim population. This population’s domestic

spending across halal economy products and services

stood at USD 184 billion in 2020 and is projected to

increased by 14.96% to reach USD 281.6 billion in

2025. In 2020, Indonesia has succeeded in

representing the largest halal consumer market in the

world with a contribution of 11.34% to the world’s

halal consumer market. (Source: Sharia Economy and

Finance Report 2020, Bank Indonesia).

In the midst of the COVID-19 pandemic, which

has weakening various sectors, such as restaurants,

retail, and tourism. However, cosmetics sector has

strengthened. According to Allied Market Research,

throughout 2020, GMV of global cosmetics reached

USD 145.3 billion and is expected to continue to

grow with a compound annual growth rate (CAGR)

of 3.6% per year, projected to reach USD 185.5

billion in 2027. The growth of the cosmetic industry

also occurred in Indonesia. According to Salam

Gateway, from 2018 to 2021, the cosmetic industry in

Indonesia has also seen positive growth with average

growth of 8% p.a.

According to the State of Global Islamic Report

2020. Globally, Muslim cosmetics consumption is

estimated to reach a value of USD 76 billion in 2024

with an average annual growth rate of 4.2%.

Currently, Muslim consumption in Indonesia is the

second largest after India.

Based on above data, all stakeholders are

competing to be able to invest and increase their

354

Syifa, A. and Vanany, I.

Determinants of Consumer Behavior Towards Purchase Intention of Halal Cosmetic Product Using Structural Equation Modelling Approach.

DOI: 10.5220/0012111100003680

In Proceedings of the 4th International Conference on Advanced Engineering and Technology (ICATECH 2023), pages 354-359

ISBN: 978-989-758-663-7; ISSN: 2975-948X

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

market share in the halal sector of cosmetics.

Investments in the cosmetics sector are expected to

reach USD 3.4 trillion or 15% of world GDP.

Indonesia is one of two countries whose get

investment in the cosmetics industry. Indonesia’s

online beauty products marketplace, Sociolla, raised

USD 98 million through its series D and E funding

rounds led by Singaporean funds. This value is the

largest investment in cosmetics industry.

Indonesia is a country that is quite consistent with

great potential to develop halal cosmetic products.

The huge market potential of halal cosmetic products

is being exploited by local and multinational cosmetic

manufacturers targeting Muslim consumers with a

strategy of making halal cosmetic products. This is

consistent with the statement that businesses that

adhere to Islamic law can attract customers.

Theory of Planned Behavior has been used in

many studies that focused on individuals’ behavioral

intention. Including studies that focus exclusively on

the intention of Muslim consumers in terms of buying

both products and services. By referring to the

outcomes that were generated for these research, it

was observed that intention is an outcome of the

influence of various types of factors.

Lada et et al. (2009) conducted research by

predicting Theory of Reasoned Action (TRA) factors,

including attitudes and subjective norms that

influence purchase intention of halal food product in

Malaysia. The result show that attitude and subjective

norms are significantly influence purchase intention.

Theory of Planned Behavior (TPB) is a

development of TRA which has succeeded in

identifying factors that predict and change behavior

(Ajzen, 1985). These factors are measured by on

attitude, subjective norms, and perceived behavioral

control.

Aisyah (2017) research that TPB influences

consumers’ purchase intention for halal cosmetics. As

a result, attitudes, subjective norms and perceived

behavioral control have a direct influence on purchase

intention. Vanany et al (2019) also confirm that TPB

factor has a positive effect on purchase intention halal

food products.

Haque (2018) conducted research in Malaysia, by

adding the religiosity variable to the Theory of

Planned Behavior model by assuming that this

variable influence purchase intention. Khan et al

(2022) also conducted research by adding several

variables, one of which was religiosity and focusing

on Generation Y in Malaysia. The results is religiosity

influences purchase intention. Mukhtar and Butt

(2012) states as well that there are differences in the

level of religiosity which will vary for every Muslim.

Shahid et al. (2019) found that globally, there is

an increment in Muslim halal awareness. Researchers

conducted research in India by adding halal

awareness to Muslim consumers regarding halal

cosmetics. As a result, halal awareness influence

purchase intention.

Kurniawati and Savitri (2020) show that the level

of halal awareness among Indonesian Generation Z

consumers is very high, with an index of 94.91. This

study also shows that religiosity is the factor that most

influences halal awareness in Indonesia with an index

of 96.91.

Wilson and Liu (2011) stated “Halal, Islam and

Muslims will always cause brand academics and

practitioners problems”, which highlights the

important of studying the buying patterns of these

consumers. In this paper, aim to modify previous

research model and investigate the factors that

influence the purchase intention of halal cosmetic

product among Muslim consumers in Jabodetabek.

2 METHOD

2.1 Research Framework

Based on the previous studies results and based on the

description of each variable, in context of this study,

the Theory of Planned Behavior variables such as

Attitude Toward Behavior (ATP), Subjective Norm

(SN), and Perceived Behavioral Control (PBC), and

additional variables Religiosity (R) and Halal

Awareness (HA). The theoretical framework is

presented in Fig. 1.

Figure 1: Theoretical Framework

Based on the review of existing literature, research

objectives and the model (Fig. 1), following

hypotheses were developed:

Determinants of Consumer Behavior Towards Purchase Intention of Halal Cosmetic Product Using Structural Equation Modelling Approach

355

H1. Attitude Towards Behavioral (ATP) will

positively influence Purchase Intention (PI) of

halal cosmetics.

H2. Subjective Norm (SN) will positively

influence PI of halal cosmetics.

H3. Perceived Behavioral Control (PBC) will

positively influence PI of halal cosmetics.

H4. Religiosity (R) will positively influence PI of

halal cosmetics.

H5. Halal Awareness (HA) will positively

influence PI of halal cosmetics.

The object determined in this study is Muslim

consumers from Jabodetabek with the following

criteria: All Men and Women between the ages of 17-

55 years who have used or currently use halal

cosmetic products. This study obtained a total of 242

respondents through a questionnaire with data

collection methods. The type of data in is quantitative

data, analysed using descriptive and verification

methods. In this study, the data were analysed using

the Structural Equation Modelling (SEM) method

using the IBM SPSS AMOS 26 software.

The questionnaire of this study was developed by

adopting and modifying items from previous studies

to certain extent in order to suit the needs of the

current study. Table 1 depicts the sources the

questionnaire items. The questionnaire used a 5-point

Likert-scale. The scale ranged from strongly disagree

to strongly agree whereby, 1 represented strongly

disagree, 2 indicated disagree, 3 indicated neural, 4

denoted agree and lastly 5 expressed strongly agree.

Table 1: Questionnaraire Items

No Factor Source

TPB Factor

(Attitude,

Subjective Norm,

Perceived

Behavioral Control)

Aisyah, 2017; Vanany et

al., 2019; Wirakurnia et

al., 2021.

2 Halal Awareness

Shahid et al., 2018;

Kurniawati dan Savitri,

2020.

3 Religiosity

Kurniawati dan Savitri,

2020; Awalia et al., 2021;

Khan et al, 2020

3 RESULT AND DISCUSSIONS

3.1 Characteristics of Respondents

The characteristics of the respondents in this study

can be seen in the following table:

Table 2: Respondent Characteristics

No Parameter

Frequency Percentage

Gender

- Male 104 42.98%

- Female 138 57.02%

Age

- 18-25 years 79 32.64%

- 26-35 years 83 34.30%

- 36-45 years 45 18.60%

- 46-55 years 35 14.46%

Last Education

- Diploma 7 2.89%

- Bachelor 155 64.05%

- Master 26 10.74%

- High School 54 22.31%

Occupation

- Teacher/Lecture 16 6.61%

- Housewife 21 8.68%

- Employee 125 51.65%

- Student 61 25.21%

- Entrepreneur 19 7.85%

Average Income

- < Rp 5.000.000 127 52.48%

- Rp 5.000.000 –

Rp 15.000.000

26 10.74%

- > Rp 15.000.000 89 36.78%

Source: Primary Processed Data (2022)

3.2 Assessment of Measurement Model

The researchers proceeded with verifying the

Measurement Model using Confirmatory Factor

Analysis (CFA) by employing IBM SPSS AMOS.

Before conducting SEM the overall measurement

model should be assessed, separately through validity

and reliability.

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356

The result of measurement model of validity test

shows that there are 19 indicators observed in

exogenous latent variables that have passed the

validity test, as all loading factors are > 0.5, as well

critical ratio > 2.58.

The result of measurement model of validity test

shows that there are 6 variables observed that have

passed the reliability test, as all construct reliability >

0.7 and variance extracted > 0.5.

3.3 Assessment of Structural Model

From several step of SEM, there are several structural

model evaluation criteria as follows:

1. Data Normality

In the AMOS output, evaluation of data normality

is carried out using a critical skewness ratio value of

± 2.58 at a significance level of 0.01 (1%). The

outcomes of normality test are depicted in AMOS

output that all indicators have a critical ratio value

below ± 2.58. Data from indicators are normally

distributed.

2. Data Outliers

Evaluation of data outliers can be seen from the

Mahalonobis Distance in the AMOS output, if

Mahalonobis d-squared value is greater than Chi-

Square value with a degree of freedom (df) of the

number of variables at a significance level of 0.05

then the data indicates an outlier. The largest

Mahalonobis d-squared value is 82.22 which is

smaller than Chi-square value of 118.75. Thus, it can

be conducted that the data are free from outliers.

3. Goodness of Fit (GOF) Model

Under this stage, all the variables were connected

to each other in order to assess the overall fit of the

model through assessment of GOF. The results of the

measurement model in Fig 2 and Table 3 using the

Maximum Likelihood estimation method.

Figure 2: Variable Measurement Model

Table 3: Goodness of Fit

GOF Index Cut-off Value Output Result

Probability p > 0.05 0.000 Not Fit

RMSEA RMSEA < 0.08 0.121 Not Fit

RMR RMR < 0.05 0.085 Not Fit

GFI GFI > 0.9 0.791 Not Fit

AGFI AGFI > 0.8 0.710 Not Fit

CMIN/DF CMIN/DF < 2 4.552 Not Fit

TLI TLI > 0.95 0.872 Not Fit

CFI CFI > 0.95 0.897 Not Fit

IFI IFI > 0.90 0.898 Not Fit

It can be seen that the indexes are not fit. SEM

model is a carried out in stages. If a fit model has not

been obtained, then the model originally needs to be

revised. First and foremost, in order to address the

issue, the researchers have deleted a number of items

that loaded with lower values as well as connecting

items with high covariance based on the modification

indices as suggested by Zainudin (2012). This process

was repeated until an adequately fitting model was

achieved that meet all the requirements for each fit

index by connecting several items. The results of

these modification are presented in Fig 3 and Table 4

as follows.

Figure 3: Variable Measurement Model After Modification

Determinants of Consumer Behavior Towards Purchase Intention of Halal Cosmetic Product Using Structural Equation Modelling Approach

357

Table 4: Goodness of Fit After Modification

GOF Index Cut-off Value Output Result

Probability p > 0.05

0.115 Fit

RMSEA RMSEA < 0.08

0.027 Fit

RMR RMR < 0.05

0.044 Fit

GFI GFI > 0.9

0.956 Fit

AGFI AGFI > 0.8

0.911 Fit

CMIN/DF CMIN/DF < 2

1.177 Fit

TLI TLI > 0.95

0.994 Fit

CFI CFI > 0.95

0.996 Fit

IFI IFI > 0.90

0.997 Fit

3.4 Hypothesis Testing

SEM was used by the researchers to validate the

proposed conceptual framework that has been

developed for the current study. The hypotheses were

evaluated according to the statistical output attained

for the model. In total the study put forth a total 5

hypotheses in regard to prior findings from the

literature. The outcomes of the hypothesis testing are

depicte in Table 5 provided below which indicates the

values for estimates, critical ratios and significance

level are shown. By looking at the table, it can be seen

that all hypotheses were supported as they had p-

values less than 0.05.

Table 5: Result of Hypotheses Testing

Hypothesis;

Relationship

Estimate;

P Value

Result

H1; PI <- ATP

0.100; 0.041

Significant

H2; PI <- SN

0.133; 0.028

Significant

H3; PI <- PBC 0.302; 0.037

Significant

H4; PI <- R 0.193; 0.001

Significant

H5; PI <- HA

0.273; 0.02

Significant

Hypothesis testing and structural equations in this

study are as follows:

PI = 0.100 ATP + 0.133 SN + 0.302 PBC

+ 0.193 R + 0.273 HA + e

(1)

3.5 Coefficient of Determination (R²)

Evaluation of the structural model is carried out by

looking at the Coefficient of Determination. The

coefficient of determination aims to measure how far

the model's ability to explain the variance of the

dependent variable. The value of the coefficient of

determination is between 0 and 1. For this research,

structural relationship based on the estimate value can

see in Table 6:

Table 6: Coefficient of Determination (R²)

Squared Multiple Correlations:

(Group number 1 - Default model)

Estimate

Purchase_Intention 0.633

From Table 6, it can be explained that estimate

value of Purchase Intention (PI) variable is 0.633.

This shows that 63.3% of PI variable can be

influenced by ATP, SN, PBC, R, and HA variables,

while the remaining 36.7% is influenced by other

variable outside current studies.

4 CONCLUSIONS

This study aimed to expand the TPB by introducing

additional factors that predict the intention to

purchase halal cosmetics. This study also addressed

the call from previous literature regarding the lack of

research in halal cosmetic in other countries. The

results revealed evidence of significant relationships

between attitude, subjective norm, perceived

behavioral control, religiosity, and halal awareness

with halal-cosmetic consumption among consumers

in Jabodetabek.

As a muslim, they have to be extra careful in their

choice of products, as they have to ensure that the

product they use comply with syariah law by being

halal. Therefore, this research highlights several

valuable insights, as all the antecedents of PI studied

directly influence the five hypotheses which had been

proposed. Therefore, market researchers in general

and international brands in particular should design

their marketing campaigns focusing on creating

awareness regarding their compliance with halal

products using open and crisp communication.

The background of the consumers is a crucial

factor that influences their responsiveness, and it has

made customers more cognisant and responsive to

halal products and ingredients. The external socio-

demographic variables, such as the education level

and occupation have an influence towards purchase

intention. Consumers with a high level of religiosity,

and who are well educated, are particularly concerned

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about the halal label being used to identify halal

cosmetics products.

Indonesia has taken a serious approach towards

developing Halal products because it has been

regulated in Law (UU) No. 33 2014 regarding Halal

Product Guarantee.

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