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A Corporate Monopoly in the Online Grocery Business of Singapore

Online Grocery Business

Corporate Monopolies

Understanding how corporate monopolies work is pretty relevant to first understand what ‘Monopolies’ are and how different types can emerge under the influence of various factors, whether these factors are based on a country’s economic, social, or legal structure.

A vital characteristic of a Monopoly is the bearing of a dominant position in an industry or sector held by a single firm, usually having more than 40% of the total market share, often perpetuating to the point of excluding viable competitors.

These Monopolies and how they interact with the demands of the market they exist in solely depends upon the means through which the monopoly was established.

The different types of monopolies include:-

  1. Simple Monopoly
  2. Discriminatory Monopoly
  3. Pure Monopoly
  4. Imperfect Monopoly
  5. Natural Monopoly
  6. Legal Monopoly
  7. Industrial or Public Monopoly

 

However, a corporate monopoly occurs when the monopoly is divided between a group of companies that own a significant portion of the goods or services of a particular industry. An example of this would the estimation revealed in an analysis report, according to which approximately 75% of the goods in Supermarkets across the US are owned and distributed by only 10 Companies, the likes of which include; Nestle, Unilever, Mars, Pepsico, CocaCola, Kellogg’s, etc.

Current Situation in Singapore

A similar situation has emerged in the Online Grocery Store Market of Singapore. A handful of multi-national companies have capitalized on the recent growth in the demand for online shopping in light of the pandemic and exploiting the lack of locally available alternatives for online grocery shopping. These Conglomerates use their almost endless supply of resources to quickly establish an infrastructure that forms the framework on which various functions such as cash-flow, storage, and logistics would operate. This near-instantaneous capitalization of the uprise in demand, accompanied by the millions of dollars more that are spent in designing and implementing marketing strategies, is simply something locally-owned businesses and startups cannot possibly match.

Impact

This current situation has led companies like RedMart, Amazon, PandaMart by Foodpanda, and Little Farms to dominate

 

the E-commerce market in Singapore, leading to locally owned businesses stuck in an endless race of playing catch-up. However, the real downside of this monopoly is experienced in the forms of multiple decisions made by these mega-corporations, leading to results that, in some cases, are borderline illegal. Whether it is the clearing of land to establish the infrastructure mentioned above, the horrible working conditions and an even miserable wage that is given to the workers, or the negative impact on the prices of goods resulting in a faster increase in inflation.

 

All these problems and more are inherent concerns accompanied by corporate monopolies. Whereas a locally-owned business has considerable upsides that are simply lacking when it comes to ‘Big Companies.’

 

One of the ways these businesses have a positive effect is through the support they offer to not only other local businesses through volunteer work or donations but also their participation in communal activities. Small Businesses also tend to lean more towards decisions and practices that are sustainable towards the environment. An example of this would be the use of eco-friendly packaging decisions that too is possible because of the more intimate nature of small businesses, in which longer and longer shelf-life counts can be ignored, and focus can be shifted more towards the freshness of the product.

 

Another fundamental way with which local businesses contribute positively is how their taxes are considered “Local Taxes,” because of which more locally-owned businesses directly result in increased City Revenue. This additional revenue means a higher budget for improvements in roads, schools, hospitals, housing, etc. In contrast, shopping using the services of these multi-national companies does not keep the tax revenue local, a problem many small communities in Singapore are facing. On the other hand, the extensive infrastructure needed to run large businesses negatively impacts local resources instead of creating opportunities and improvements for the community.

 

All these positives are accompanied by the fact that locally-owned businesses create job opportunities that provide incomparably better working conditions, better wages, and more lenient delivery times, so the drivers don’t have to risk their lives every time they have to make a delivery, and we have a system that immeasurably improves the living standards of people of a community.

However, the biggest hurdle that we face towards shifting the general population’s preference towards shopping locally is the lack of awareness, which again is mainly clouded by the constant bombardment of ad campaigns that are a part of the marketing strategies of these mega-corporations.

Conclusion

While keeping all these factors in mind, it is essential to note that there are positives that come with shopping from these ‘Big Companies,’ whether it is in the form of a greater sense of convenience, the standardized quality of products, or simply the lower cost on goods due to higher competition in the marketplace. This dilemma makes working towards any single solution while ignoring the other an uncertain decision.

Therefore, a perfect solution would be to work towards improvements in both fields so that the general population is not robbed of their freedom to choose the means through which they want to buy their groceries.

So when talking about locally owned businesses, the most practical step would be to spread awareness about the positive impact they produce and how they result in a higher standard of living for the whole community. This, accompanied by the government’s support and the community in helping small businesses overcome the shortcomings that they may have when compared to mega-corporations, will undoubtedly result in the betterment of the community as a whole.

Similarly, the regulation of big companies by laws placed by the government to prevent exploitation of workers and provide them their rights, environmental laws that prevent unfair clearing of lands as well as adopting more sustainable practices, and the strict and watchful eye of Food Authorities that ensure the quality of goods while removing any health concerns the population may have are all things that should be worked towards. This effort would finally make buying from these online grocery chains a much more desirable option.

 

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