Name : Sinta Aryani

NIM : 050153231

Study Program : Accounting

Please select one of the questions below. Then, write an essay consisting of 3
paragraphs. Explain your own opinion with the referee regarding the question you chose.

Discuss the impact of conditions such as monopsony created by online markets on

small and medium enterprises (SMEs) in Indonesia. In your essay, explain how the
concentration of buyer power on platforms such as Tokopedia and Shopee can affect
SMEs’ prices, competitiveness and growth prospects. Give examples to support your
argument.

Answer :

Analysis of the Impact of Monopsony on SMEs in Indonesia through Online

Market Platforms

Paragraph 1

Monopsony is a condition where there is one buyer who has a large or dominant influence
in the market, which can influence prices and market conditions. Platforms like
Tokopedia and Shopee aggregate large numbers of buyers, creating a monopsony-like
effect where they can influence prices and terms due to their large user base. Monopsony
can occur when these platforms have significant purchasing power or dictate trading
terms for SMEs.

Paragraph 2

The concentration of buyer power in online marketplace platforms may cause SMEs to
face pressure to lower prices. Platforms like Tokopedia and Shopee, with large numbers
of users, can negotiate lower prices from SME sellers because they have access to a wide
market. Thus reducing the profit margin of SMEs. Monopsony can also highlight the
competitiveness of SMEs. With only one or a few large buyers, SMEs may be forced to
adhere to the platform’s terms, which may involve lowering prices or increasing product
quality without fair compensation.

Paragraph 3

Monopsony-like conditions created by online markets can lead to lower prices, increased
competition, and potentially limit the growth of SMEs in Indonesia. Monopsony power
refers to the market influence and price control exercised by one buyer over many sellers,
which can lead to lower prices and potentially adverse effects on the seller’s business
prospects. Reliance on monopsony online marketplace platforms can limit SMEs’ ability
to set profitable prices and develop effective marketing strategies. For example, an online
marketplace platform may offer a major promotion that requires SMEs to lower the prices
of their products. If SMEs don’t follow suit, they may miss out on significant consumer
access available through the platform.

Conclusion

Monopsony is a market condition in which there is only one buyer for many sellers, so
that buyers have significant power over prices. The monopsony conditions created by
online market platforms such as Tokopedia and Shopee can have a significant impact on
prices, competitiveness and growth prospects for SMEs in Indonesia. SMEs need to
consider sales and marketing diversification strategies to reduce dependence on one or
a few dominant buyer platforms.

Reference source : Monopoly and monopsony are related cases of market price
fixing https://images.app.goo.gl/Mq1KMJPHrUbguo2E6