Halal certification boosts ratings, not sales: signalling theory and MSME modernization in Indonesia’s digital food ecosystem

Purpose This study examines how halal certification influences customer ratings and sales performance of meatball restaurants operating on online food delivery platforms in Indonesia, a Muslim-majority market where halal compliance is both a legal mandate and a consumer expectation. Design/methodology/approach Using an explanatory sequential mixed-methods design, we analyzed survey data from 195 GoFood vendors in Yogyakarta and Solo Raya, supplemented by in-depth interviews with 10 entrepreneurs. Non-parametric tests assessed certification's impact on ratings and sales, while thematic analysis explored operational, strategic and institutional drivers. Findings Halal certification significantly improves customer ratings, functioning as a credible signal of quality and hygiene (thayyib) in digitally mediated, information-asymmetric environments. However, it shows no statistically significant effect on sales turnover, as performance is mediated by pricing, delivery speed and loyalty. Certification triggers operational modernization (traceability, facility upgrades, staff training) even among micro-enterprises, yet adoption remains size-dependent due to cost, technology and cultural barriers. Research limitations/implications While geographically focused, findings offer transferable insights for Muslim-majority markets undergoing digital foodservice transformation. Practical implications Platforms could enhance customer trust by integrating halal status into algorithms (badges, filters); policymakers must simplify access to free certification; MSMEs may leverage certification as a trust-based branding tool, even without clear sales gains. Originality/value This is the first study to quantify halal certification’s performance impact in digital food ecosystems, bridging signalling and the institutional theory to reveal certification as both a market signal and catalyst for SME modernization.