Producing Loyalty: Social Networks, Religious Legitimacy, and Ethnic Business Strategies in Pasuruan Local Retail Economies

Abstract

This study examines how customer loyalty is formed within ethnic and religious competition in the local retail economy of Pasuruan Regency and City, East Java, addressing the limited scholarship on loyalty formation in multi-actor markets where pesantren-based enterprises, ethnic businesses, and indigenous retailers interact simultaneously; guided by Pierre Bourdieu’s concepts of field, capital, and habitus, as well as Jürgen Habermas’s notions of system, lifeworld, and communicative action, the research employed a qualitative multisite case-study design conducted from January to February 2026, with data collected through in-depth interviews, participant observation, and document analysis involving 47 informants across four business clusters: Sidogiri Islamic Boarding School (Basmalah Mart), Arab, Chinese, and Javanese (indigenous enterprises); the findings reveal that customer loyalty emerges through distinct configurations of social networks, varying modes of capital conversion, and habitus-based business practices that shape trust, service, and market positioning, while the interaction between market rationality and community lifeworlds produces competitive coexistence characterized by implicit market segmentation; theoretically, this study contributes by integrating Bourdieu and Habermas to explain loyalty as a social, symbolic, and communicative process, and practically, it offers insights for retailers, ethnic business communities, and local policymakers in developing inclusive and culturally grounded market strategies.