Nama: Heri Waloyo

NIM: 048433019

The rise of online marketplaces in Indonesia, such as Tokopedia and Shopee, has led to the creation
of monopsony-like conditions that significantly impact small and medium-sized enterprises (SMEs) in
the country. These platforms have become dominant players in the e-commerce landscape, offering
a wide range of products and services to consumers. While they have undoubtedly increased access
to markets and facilitated business for many SMEs, the concentration of buyer power in these
platforms has far-reaching consequences for the competitiveness and growth prospects of these
enterprises.

One of the primary effects of monopsony is the ability of the dominant buyer to dictate prices. In
the case of online marketplaces, this means that SMEs are often forced to accept lower prices for
their products and services due to the limited number of buyers available. This can lead to reduced
profit margins and potentially even losses for the SMEs, making it difficult for them to sustain their
businesses in the long term. For example, a study by the World Bank found that in Indonesia, the
minimum wage policy has a negligible impact on employment status, but it does affect labor
earnings. This could be attributed to the fact that the minimum wage is often set at a level that is
not reflective of the market conditions, which can lead to reduced labor earnings for SMEs.

Another significant impact of monopsony is the reduction in competition. When a single buyer
dominates a market, it can stifle innovation and efficiency, as there is no pressure to improve
products or services to stay competitive. This can lead to a lack of choice for consumers, who are
often forced to rely on a single provider, which can result in poor quality services and limited access
to resources. For SMEs, this means that they are less likely to be able to differentiate themselves
from their competitors and may struggle to maintain their market share in the face of a dominant
buyer.

Furthermore, the concentration of buyer power in online marketplaces can also affect the growth
prospects of SMEs. When a single buyer has significant control over the market, it can limit the
ability of SMEs to scale up their businesses and expand their operations. This can lead to a lack of
investment in new technologies, processes, and people, which can hinder the long-term growth and
development of the SMEs.

In conclusion, the monopsony-like conditions created by online marketplaces in Indonesia have

significant implications for the competitiveness and growth prospects of SMEs. The concentration of
buyer power in platforms such as Tokopedia and Shopee can lead to reduced profit margins,
reduced competition, and limited growth opportunities for SMEs. It is essential that policymakers
and regulators consider these issues and implement measures to promote fair competition and
protect the interests of SMEs in the e-commerce.