A Strategy Needed to Win Competition in Our Own Country

KOMPAS/ISMAIL ZAKARIA

Two employees make cookies in the production room of the Nutsafir Lombok business, which is engaged in food processing based on local agricultural grains in West Nusa Tenggara (NTB) in Mataram, Thursday (1/7/2021). Businesses engaged in the halal industry face various challenges, from the Lombok earthquake in 2018 to the pandemic in 2020.

JAKARTA, KOMPAS — As the country with the largest Muslim population in the world, Indonesia has become the largest consumer of halal products. However, local industry players have to compete with imported halal products, which are often sold at lower prices. Local entrepreneurs need to innovate and look for strategies to win the competition in their own countries.

According to the State of Global Islamic Economy Report 2020-2021, Indonesia is the largest consumer of halal products at an estimated US$214 billion, about 10 percent of global halal products. However, a large portion of halal products sold in the country consist of imported products.

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The director of PT BeeMa Boga Arta, Fransisca Natalia Widowati, said that selling halal products in the domestic market was as difficult as exporting them to the global market. Indonesians often prefer to buy imported halal goods because they think the quality is better. The prices of some imported products are also often lower, especially if they are marketed through e-commerce platforms.

Fransisca, who produces and sells premium organic honey BeeMa Honey, gave an example that Indonesian consumers often underestimated the quality of local honey and preferred to buy imported honey. Apart from the fact that local honey packaging is considered unattractive, many producers also sell honey mixed with other ingredients, such as sugar.

“Here, it is important to have halal certification. Once there is a halal stamp, the process from upstream to downstream is guaranteed to be safe, healthy and clean. The marketing strategy must also be open,” Fransisca said last weekend.

Kompas

Halal Food Exporting and Consumer Countries (billion US dollars). Consumer Countries (Negara Konsumen). Exporting Country (Negara Pengekspor).

Maintaining quality

Meanwhile, Sayuk Wibawati, the owner of Nutsafir Cookies Lombok, a producer of food made from local grains from West Nusa Tenggara, emphasized that obtaining halal certification and maintaining the quality were the keys to be able to compete , especially in the midst of the Covid-19 pandemic.

According to Sayuk, halal certification makes it easier for her company to work with various parties, for example with hotels or PT Aero Wisata, a subsidiary of PT Garuda Indonesia (Persero). In addition, she said, the halal certification also ensured that all the raw materials, equipment, processing, and even personal protective equipment (PPE) used by employees complied with halal rules.

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The winner of the 2017 Halal Awards’ Best Halal Small and Medium Enterprise (SME) in Indonesia also continues to innovate by looking at customer needs, such as by conducting market demand surveys through a digital platform.

The director of Small, Medium and Multifarious Industries (IKMA) of the Industry Ministry, Gati Wibawaningsih, said it was a long time coming for Indonesia to become more than merely a market and consumer of halal products. “We have to become the main player, and for this, we have to make a lot of preparations in advance. Starting with the domestic market, we hope in 2024, we will be able to become a major player in the global halal market," said Gati. For this reason, the government is developing a number of halal industrial centers.

This article was translated by Hendarsyah Tarmizi.