Name : Annisa Nurlita Anndarini

NIM : 051527681

1. Discuss the impact of monopsony-like conditions created by online

marketplaces on small and medium-sized enterprises (SMEs) in Indonesia. In
your essay, explain how the concentration of buyer power in platforms such as
Tokopedia and Shopee can affect the pricing, competitiveness, and growth
prospects of SMEs. Provide examples to support your arguments.

Impact of Monopsony-Like Conditions Created by Online Marketplaces on

SMEs in Indonesia Online marketplaces like Tokopedia and Shopee in
Indonesia have created monopsony-like conditions, where a single buyer (the
platform) has significant market power. This has several implications for small
and medium-sized enterprises (SMEs) in the country.

Pricing

• Downward Pressure on Prices: Online marketplaces with significant

buyer power can exert downward pressure on the prices at which SMEs
sell their products. The platforms may negotiate lower prices from SMEs,
reducing their profit margins.
• Price Discrimination: Platforms may also engage in price discrimination,
offering different prices to different SMEs based on their bargaining
power, further impacting the pricing strategies of SMEs.

Competitiveness

• Unequal Playing Field: The concentration of buyer power in online

marketplaces can create an unequal playing field for SMEs. Larger
sellers may have more bargaining power, leading to unfair competition
for smaller SMEs.
• Barriers to Entry: The dominance of online marketplaces can create
barriers to entry for new SMEs, as they may struggle to compete with
established sellers who have better terms with the platforms.

Growth Prospects

• Limited Growth Opportunities: SMEs may find their growth prospects

limited as they are constrained by the terms and conditions set by the
online marketplaces. This can hinder their ability to expand their
customer base and reach new markets.
• Innovation Constraints: The dominance of online platforms may also
stifle innovation among SMEs, as they are pressured to conform to the
platforms' requirements rather than focusing on innovative products and
services.

Examples

• Pricing: For example, Tokopedia's strong position in the market may

allow it to negotiate lower prices from SMEs, impacting their profitability.
 • Competitiveness: Shopee's dominance may create challenges for
smaller sellers to compete with larger, more established businesses on
the platform.
• Growth Prospects: New SMEs entering the market may face difficulties
in gaining visibility and attracting customers due to the strong presence
of existing sellers on platforms like Tokopedia and Shopee.

In conclusion, the concentration of buyer power in online marketplaces like

Tokopedia and Shopee can significantly affect the pricing, competitiveness,
and growth prospects of SMEs in Indonesia, posing challenges for the
sustainable development of small businesses in the digital economy.

2. Analyze the effects of monopsony-like conditions in the Indonesian agricultural

sector, particularly focusing on the relationship between large supermarket
chains and small-scale farmers. In your essay, discuss how the dominance of
a few large buyers can influence the pricing of agricultural products, the income
stability of farmers, and the overall sustainability of the agricultural sector. Use
specific examples to illustrate your points.

Effects of Monopsony-Like Conditions in the Indonesian Agricultural Sector

In the Indonesian agricultural sector, monopsony-like conditions, where a few

large buyers dominate the market, have significant effects on small-scale
farmers and the overall sustainability of the sector. The dominance of large
supermarket chains as buyers can influence the pricing of agricultural products,
the income stability of farmers, and the sector's sustainability.

Pricing of Agricultural Products

Under monopsony-like conditions, large buyers have substantial market power,

allowing them to dictate prices to farmers. This often results in lower prices for
agricultural products, as farmers have limited alternative buyers. For example,
in Indonesia, large supermarket chains may leverage their market dominance
to negotiate lower prices for produce, reducing the profitability of small-scale
farmers.

Income Stability of Farmers

The influence of large buyers on pricing directly impacts the income stability of
small-scale farmers. With limited bargaining power, farmers are vulnerable to
price fluctuations imposed by dominant buyers. This can lead to income
instability, making it challenging for farmers to plan for the future and invest in
their farms. For instance, when supermarket chains demand lower prices,
farmers' incomes decrease, affecting their financial security.

Overall Sustainability of the Agricultural Sector

Monopsony-like conditions can threaten the sustainability of the agricultural

sector in Indonesia. The unequal power dynamic between large buyers and
small-scale farmers can lead to exploitation and disempowerment of the latter.
This, in turn, may discourage younger generations from entering the agricultural
sector, potentially leading to a decline in agricultural productivity and innovation.

In conclusion, monopsony-like conditions in the Indonesian agricultural sector,

particularly driven by the dominance of large supermarket chains, have
detrimental effects on the pricing of agricultural products, the income stability
of farmers, and the overall sustainability of the sector. Addressing these issues
requires policies that promote fair competition, empower small-scale farmers
and ensure a more equitable distribution of market power.