Shari’a Compliance to Improve the Competitiveness of the Industry

of Hijab

Juliana Juliana, Firmansyah Firmansyah, Aneu Cahyaneu, Habibah Moslem and Irfaany Fauziyah

Taufiq

Economics and Islamic Finance Department, Universitas Pendidikan Indonesia, Jl. Dr. Setiabudhi No. 229, Bandung,

Indonesia

julian@upi.edu

Keywords: Syariah Compliance, Competitiveness, Hijab Industry.

Abstract: This research is based on the problems that arise due to the increase of competitiveness in the hijab industry.

The issue includes aspects of the products, human resources and capital. The purpose of this research is to

find a general overview about the veil's industry that exists in Cicalengka District. Furthermore, elaborate

model of Shari’a Compliance in improving the competitiveness of Hijab industry in Cicalengka District,

Bandung Regency.The method used in this research is Explanatory Research, while the research approach

using descriptive quantitative with statistical tools descriptive. Data source is the craftsmen in the center of

hijab industry in Cicalengka District, Regency Bandung. The result of this research shows that Cicalengka

area is a very strategic area in the development of hood industry in west java region. As for the aspects of

shari’a compliance and competitiveness, most of the craftsmen have not understood and implemented the

values of shari’a compliance in business. While viewed from the aspect of competitiveness, there are still

obstacles in improving competitiveness, for example in design aspects, raw materials and capital.

1 INTRODUCTION

A poor country is not only caused by lack of

resources, but also does not have enough number of

good entrepreneurs (Gupta and Srinivasan, 1992).

Schumpeter and Matlay (in Julian, 2017) say the

activities of qualified entrepreneurs will accelerate

the economic development of a country. The same

thing is supported by Aziz (1998) who stressed that

the best community is a society that has a large

number of entrepreneurs. Based on this, the role of

the entrepreneur is very important because it can

accelerate the development, even distribution of

income can further improve the welfare of the

community. One of the opportunities to increase the

number of entrepreneurs is starting the work of the

Muslim fashion industry, one of its products is hijab.

In Indonesia, the rate of development of the Muslim

fashion industry continues to experience a quite

encouraging increase. Hijab is no longer identical

with the old society, but along with the times and

increased understanding of Muslim women, hijab has

penetrated among young women. Young women

today can wear hijab and still look fashionable

because there are many emerging modern hijab

designs these days.

The Association of Indonesian Fashion

Entrepreneurs and Designers (APPMI DIY) said they

are ready to welcome Indonesia into the world hijab

mecca in the year 2020. Chairman of APPMI DIY Lia

Mustafa said that by 2020, Indonesia will become a

barometer of the World Moslem Fashion because

Indonesia has a rich cultural treasury, then Indonesia

has talent, inventiveness and proven skill and

concentration of the largest Muslim fashion in the

world long Islamic tradition. He mentioned this at the

socialization of the grand event of Jogja Fashion

Week 2015 when interviewed by Radio Republik

Indonesia (RRI) (RRI, 2015).

The veil business in Cicalengka, the velocity of

money there can reach 100 billion rupiah per day.

Hijab products made by Cicalengka scarf craftsmen

are marketed in local markets such as Tanah Abang

Jakarta and Tegalgubug Cirebon, these hijab products

are also accepted in Malaysia and Morocco (Tribun

News, 2016).

However, in the development of hijab industry

there are also some challenges. This was stated by

Director General of Small and Medium Industries

Juliana, J., Firmansyah, F., Cahyaneu, A., Moslem, H. and Tauﬁq, I.

Shari’a Compliance to Improve the Competitiveness of the Industry of Hijab.

In Proceedings of the 1st International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP 2017) - Transforming Islamic Economy and Societies, pages 693-697

ISBN: 978-989-758-315-5

693

(SMI) of the Ministry of Industry, Euis Sa'idah the

press conference Indonesia Fashion Week which was

held on February 5, 2013. He said Indonesia had at

least five challenges in its develop the fashion

industry, namely raw materials, technology, ability of

human resources, marketing, and capital. We are still

highly dependent on imports such as cotton and silk

(VIVA news, 2014). To be the qibla of the world's

Muslim fashion, Indonesia must face at least some

challenges from raw materials that still import from

other countries, production process with technology

that is still very simple, human resource capability not

yet have sufficient knowledge base, the product is

already fulfilled and in accordance with the shari’a

standard or not until the capital issue.

In addition to some of the constraints described

above, there is still a serious problem. Indonesia has

still low competitiveness of Indonesian products.

Based on GCI data published by the World Economic

Forum (WEF), Indonesia is ranked 38th in ranking up

compared to the previous year at 50 and 46. However,

Indonesia still cannot compete with other Southeast

Asian countries such as Singapore, Malaysia, Brunei

Darussalam and Thailand. Competitive advantage is

a strategic issue in the development of industry

globally and nationally (Lisnawati, 2014).

Based on the above description, it is important to

find a solution to overcome these problems as related

to the improvement of human resources capabilities,

products and capital. The ability of human resources,

products and capital is an important thing to improve

the quality of Competitiveness. However, the current

pattern of business tend to use conventional patterns

will hinder a Muslim business actors to be able to

expand their business. Conventional patterns such as;

the integrity of human resources that are still lacking

and not in accordance with Islamic values, the

production is not based on the aspects of shari’a until

the capital of each use riba. Yet for a Muslim, religion

has an important role in life, so all activities should

be guided by religion, including in the case of

economic muamalah (Julian, 2017), is not allowed to

take riba, because riba is something that is strictly

forbidden in religion.

2 LITERATURE REVIEW

2.1 Shari’a Business

Islamic business consists of two words namely

business and Islam (shari’a). Business is defined as

any activity of individuals or organizations to produce

and market goods or services to consumers in order

to gain profit. While Islam is a complete and

comprehensive, Islam is a way of life that strongly

encourages human activity in various things such as

entrepreneurship, development, agriculture, industry,

science and trade. It all shows that Islam is a religion

that is not rigid and very accommodating. One proof

that Islam not only regulate in the problems of the

nature of vertical relationship with God or often

known hablumminallah. Islam also provides space

for horizontal relationship with Allah SWT or

hablumminanas such as muamalah issues including

Islam it self to open the space to regulate humans with

himself who often know as hablumminafsi. (An

Nabhani, 2001)

Based on the explanation then, Islam is very

relevant to business activities. So based on that

explanation, the Islamic Business (Shari’a Business)

is all business activities in accordance with Islamic

Shari’a.

2.2 The Competitiveness (Diamond

Porter Modeling)

Porter posits the theory that there are four attributes

of a state forming an environment in which local

firms will compete, and these attributes support or

hinder the process of creating comparative advantage

(Hill et al., 2013). The Diamond model explains the

international competitiveness of a country or region.

In the original term the diamond model is called

"diamond of advantage" because it is depicted as a

diamond-shaped box whose arrangement contains a

number of factors that determine the competitiveness

of a region or country. According to Porter (1993)

diamond of advantage model, a region will naturally

develop a competitive advantage based on the

innovation capabilities of the companies in it and the

economic vitality of a region is a direct result of the

industry competition in the region (Soemarno, 2011).

Diamond Porter's Theory has four important

components in looking at competitiveness, these

components are supporting factors, demand factors,

related industry factors and supporting industries, and

corporate strategy, structure, and competition factors.

In addition to the four components that interacted

above there are two components that affect the four

components are government factors and opportunity

factors (Kaunang, 2013).

2.3 Shari’a Compliance

The meaning of compliance (language compliance)

that is obedient, obedient is like according to; obey

the command, and rules (KBBI Dictionary, 2016). In

ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy

694

compliance terms, in corporate governance, it follows

a clearly defined specification, standard or law that is

normally issued by an authorized institution or

organization in a particular field.Meanwhile, the

meaning of shari’a is etymologically rooted from a

word syara'a which means "something that opened

wide to him". Based on that, the Shari’a is interpreted

as "the source of drinking water". This word then

connected by the Arabs with a straight path that must

be followed. The meaning of shari’a in

terminologically disclosed by the experts that shari’a

is the rules relating to human behavior, both with

respect to the principal law and the branch law

derived from the Qur'an and Hadith of the Prophet

Based on the explanation above, shari’a

compliance can be defined as follows, that is follow

the standards or laws or rules relating to human

behavior, both with respect to the main law and

branch law derived from the Qur'an and hadith of the

Prophet saw. According to Mahmudah (2012), the

meaning of Compliance is to follow a specification,

standard or law that has been clearly regulated, while

shari’a compliance means following the standards or

shari’a law. The meaning of shari’a compliance is

very broad, within the scope of business the

implementation of shari’a compliance is based on

Islamic business ethics, namely principles, norms and

standards of behavior that regulate individuals and

groups that distinguish what is right and what is

wrong in doing business in accordance with Islamic

Shari’a principles.

Shari’a compliance is the fulfillment of all Shari’a

principles in all activities undertaken as a

manifestation of the characteristics of muamalah

practices in accordance with shari’a. Arifin (2005)

describes consistently and makes shari’a as the

framework for shari’a bank system and finance in

resource allocation, management, production, capital

market activity, wealth distribution.

In the previous research based on Rostow's theory

and Porter's theory, the factors that influence the

competitiveness of small-scale batik industrial center

in Jambi city, that the factors of product,

infrastructure, Government Policy, human resources

and science and technology simultaneously have a big

influence in improving the competitiveness of

Jambi’s batik. And partially factor Infrastructure,

human resources and science and technology

influence Jambi’s batik competitiveness (Raf, 2012).

3 METHODOLOGY

The method used in this research is quantitative

descriptive. The approach using explanatory survey

means that this research is held to obtain facts, look

for factual descriptions and try to describe the

symptoms of current practice (Nazir, 1988). The

object of this research is the center of hijab industry

in Cicalengka District, Bandung Regency West Java

Province, as many as 30 Hijab Cicalengka Business

become object in this research. The characteristics is

industrial center with the classification of apprel

industry so they produces the veil with a variety of

models, the industrial scale is small and micro

industries.

4 RESULT AND DISCUSSION

Based on the data and on understanding of Maysir,

Riba and Gharar, it can be interpreted that about 90%

of the respondents agree that the business must be free

from Maysir, Riba and Gharar. However, in practice

there are still many scarf entrepreneurs who use loans

from conventional banks by applying the instruments

of interest (interest). This is evident from the results

of research that shows there are 7 people who source

of capital from his own, 23 people from the loan. Of

the 23 people who use loans mostly using

conventional banks. The average capital used in the

range of 50 to 250 million. With such capital, the

craftsmen usually take advantage of 10% -15% of

sales turnover.

The largest number of workers are 17 people in

one company and the average business has 4 workers.

Marketing model indicator shows that the average

marketing technology used is through direct sales.

For Sewing and cutting machines indicator, on

average, each company uses the most sewing

machines are 16 units by one entrepeneur

On production scale, the scale of 100 score

production per week can be done by 8 entrepeneurs.

From the data, people that has NPWP or taxpayer

numer are 15 enterpreuneurs

On Government support, it shows that the

government still has no role in supporting the hijab

industry in cicalengka.The longest entrepeneur is 15

years and the average is 7 years and the average

education of entrepeneur is junior high school.

The total of employers are 19 respondents of male

sex and 6 female respondents. This shows that the

number of entrepreneurs who are male is more than

female. This is because in producing a veil requires a

Shari’a Compliance to Improve the Competitiveness of the Industry of Hijab

695

lot of energy. Most respondents are at the age of 32-

37 years are 12 people. This shows that entrepreneurs

veil mostly in the productive age.

4.1 Understanding Against Shari’a

Compliance

Based on the data, respondens has high understanding

against shari’a compiance. The research result shows

about 90% of the respondents agree that the business

must be free from Maysir, Riba and Gharar and as

many as 73% of respondents agree that business

should bring maslahat. The result also shows that

77% of Respondents are agree that the selling price of

their business should be clear and 90% of respondents

are agree that the object of goods sold must have

goods.

4.2 Variable Competitiveness /

Management

Based on the data, it can be explained that 77% of

them agree that their Production should be lawful and

of good quality. It also shows that 70% of respondents

agree that the business must have a diligent human

resources and in accordance with his expertise. On

Financial Indicators indicator, only 88% of

respondents agree that the business should make a

financial record and not borrow capital with interest

system

The result shows low percentase for marketing

indicator. It shows only 56% of the respondents

agreed the product marketing must be complete and

look good. On Profit and Benefit Indicator, 79% of

respondents agree that business should have

advantages and great benefits for the community. The

data also shows 80% of respondents agree that

business brings blessing.

5 CONCLUSIONS

Based on the research, in general, veil entrepreneurs

has been implementing the principles of shari’a

compliance, although there are some who have not

but the number is relatively small. It is certainly a

concern that a business is not only looking for big

profits, but also must be tied to the values of shari’a

(Shari'a Compliance). Implementation of shari’a

compliance can be interesting topic to be studied in

the study of Islamic business, especially in this era.

The development trend of science with the theme of

shari’a is a trend in academic studies. Nevertheless,

the results of this research can add to the scientific

treasures of Islamic economics. The cervical industry

in cicalengka district is a very prospect industry to

develope but based on the results of research, the

support from the government is still lacking. They

need more support, especially in the form of

regulation or capital assistance.

REFERENCES

An Nabhani, 2001. Nizamul Islam, Pustaka Thariqul Izzah,

Edisi mu’tamadah. Bogor.

Arifin. 2005. Teori Keuangan dan Pasar Modal.

Yogyakarta: Ekosinia.

Aziz, A., 1998. Asas-Asas Keusahawanan, Prentice Hall.

Petaling Jaya.

Gupta, G. B., Srinivasan, N. P., 1992. Entrepreneurial

Development, Sultan Chand and Sons. New Delhi.

Hill, C., Wee, C., Udayasankar, K., 2013. Bisnis

Internasional Perspektif Asia, Salemba Empat. Jakarta.

Juliana, 2017. Peran Syariahpreneur Dalam Mewujudkan

Kesejahteraan Masyarakat: Studi Pada Bisnis Properti

di Wilayah Bandung Raya, SPS UIN Syarif

Hidayatullah. Jakarta, Disertasi.

Kaunang, W. R., 2013. Daya Saing Ekspor Komoditi

Minyak Kelapa Sulawesi Utara. Jurnal Emba. 1304-

1316.

KBBI. 2016. Kamus Besar Bahasa Indonesia (KBBI),

[online]. Available at: http://kbbi.web.id. Accessed by:

20 March 2016.

Lisnawati, 2014. Pemetaan kekuatan lingkungan industri

kerudung cicalengka dalam upaya pengembangan

potensi kawasan industri Sebagai sentra unggulan

umkm kabupaten bandung Yang memiliki daya saing,

LPPM UPI. Bandung.

Mahmudah, N. A., 2012. Pengawasan Terhadap Bisnis

Syariah di Indonesia. Jurnal Ekonomi dan Hukum

Islam. Vol. 2, No. 2.

Nazir, M. 1988. Metode Penelitian. Ghalia Indonesia.

Jakarta.

Porter, M.E. 1993. Keunggulan Bersaing: Menciptakan dan

Mempertahankan Kinerja Unggul. Erlangga. Jakarta,

2nd

edition.

Raf, M., 2012. Analisis Eksplanatori Faktor Daya Saing

Industri Kecil (Studi Pada Sentra Industri Kecil Batik

Di Kota Jambi). Jurnal Manajemen Dan

Kewirausahaan. 14(2).

RRI, 2015. Indonesia Kiblat Hijab Dunia 2020, [Online].

Available at:

http://www.rri.co.id/yogyakarta/post/berita/178006/fas

hion/indonesia_kiblat_hijab_dunia_2020.html.

Accessed by: 20 March 2016.

Soemarno, 2011. Ekosistem dan Wilayah. Bahan Kajian

MK Dinamika Pengembangan Wilayah.

Susanty, A., 2013. Analisis Faktor-Faktor Yang

Mempengaruhi Pertumbuhan Klaster Batik

Pekalongan (Studi Kasus Pada Klaster Batik Kauman,

ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy

696

Pesindon Dan Jenggot). Jurnal JATI Undip. Vol VIII,

No 1,Januari 2013.

Tribun News, 2016. Perputaran Bisnis Kerudung

Cicalengka Rp. 100/Hari. [Online]. Available at:

http://www.tribunnews.com/bisnis/2012/09/12/perputa

ran-bisnis-kerudung-cicalengka-rp-100-m-hari.

Accessed by: 20 March 2015.

Viva News, 2014. Fashion Indonesia mendunia, [Online].

Available at:

http://m.news.viva.co.id/news/read/516740-fashion-

indonesia-mendunia. Accessed by: 20 March 2015.

Shari’a Compliance to Improve the Competitiveness of the Industry of Hijab

697