Determinants of Digital Marketing Adoption and MSME Performance in Indonesia’s Halal Food Sector

Background Digital transformation has become a strategic pillar of Indonesia’s economy, with an estimated contribution of USD 130 billion by 2025. Halal Micro, Small, and Medium Enterprises (MSMEs), particularly in the food and beverage sector, contribute approximately USD 180 billion annually, account for around 60% of Indonesia’s Gross Domestic Product (GDP), and employ nearly 97% of the national workforce. However, digital marketing adoption among halal MSMEs remains limited due to low digital literacy, inadequate infrastructure, financial constraints, and inconsistent implementation of sharia business principles. This study examines the determinants of digital marketing adoption and its influence on the performance of halal MSMEs in Indonesia. Methods This study employed an explanatory quantitative research design based on the Technology–Organization–Environment–Personal (TOEP) framework. Data were collected from 500 halal-certified MSMEs operating in the food and beverage sector across Indonesia using a structured questionnaire. Structural Equation Modeling–Partial Least Squares (SEM-PLS) with SmartPLS 4.0 was used to evaluate the relationships among technological, organizational, environmental, and personal factors, digital marketing adoption, and business performance. Results The findings indicate that technological, organizational, environmental, and personal factors significantly influence digital marketing adoption among halal MSMEs. Furthermore, digital marketing adoption has a positive and significant effect on business performance by improving operational efficiency, increasing customer loyalty, strengthening halal brand visibility, and enhancing overall business competitiveness. Conclusions Digital marketing adoption is a key strategic driver for improving the competitiveness and sustainability of halal MSMEs in Indonesia. Strengthening digital capabilities through technological readiness, organizational support, favorable business environments, and personal competencies is essential to accelerate digital transformation and maximize the contribution of halal MSMEs to the national digital economy.