Halal MSME Digitalization: Information Technology- Enabled Business Model Adaptation in the Riau Islands

This study analyzes the innovation strategies of Smartphone Cellular, an MSME in Batam, in adapting its business model through information technology. Using a descriptive exploratory qualitative approach, the study identified five key innovations: COD delivery services, COD transaction documentation as marketing content, multi-currency payments (IDR, SGD, and MYR), cross-island and cross-border distribution partnerships, and live streaming. These innovations form the SIJORI Adaptive Smartphone MSME Business Model (Hybrid-Trust Model), which integrates Online-to-Offline (O2O), social commerce, and trust-based services. Information technology improves operational efficiency, expands market reach, and strengthens MSME competitiveness. However, the business faces challenges related to exchange-rate fluctuations, logistics complexity, limited digital competencies, and FTZ implementation, which may increase the cost and complexity of distributing goods to areas outside the FTZ. The findings indicate that integrating technology, trust, logistics flexibility, and geographical proximity provides an adaptive strategy for MSMEs in the SIJORI region.