G10PP Economics Winter Holiday Research Report

Your name Winnie

1. News for analysis (paste the news you found below):

2. Summarize the information in the news (when, what had happened, what’s the effect to the society, etc.):
 Market failure: Monopoly

Some time ago, SF announced that China Express was easily acquired by Hive Box.
After several acquisitions, Hive Box now has a market share of more than 69 percent
and more than 70 percent in several first-tier cities. Not only did Hive Box have a
monopoly on the market, but it also suddenly came up with a fee. This has had a
significant impact on people who are accustomed to online shopping. Users
complain that the couriers leave the goods without notice, so some goods that
cannot be placed in the delivery cabinet are damaged or have to carry heavy items
upstairs by themselves, and now they are more likely to bear extra overtime charges.
Couriers complain that the delivery cabinets are not low in charge, with a single profit
of only 1 yuan or 2 yuan, so the delivery cabinets may have to be divided away at
least a quarter, which may also cause complaints from users. Sellers have to bear the
risk of return if the couriers place the boxes without permission.

3. Define concepts related to the news (for example: market failure, merit good, demerit good, monopoly,
external cost, etc):
This news is about the market monopoly, because now more and more people choose
online shopping, and online at the same time, not because of many reasons why people
didn't have much time to take delivery, so can only be temporary to express BOX, and
the HIVE BOX is occupied in many cities the staging express BOX to be exclusive,
monopolized the Courier staging another BOX.

4. which part of the news indicated market failure? (copy and paste the relevant paragraph in the
column):
Fees are still in the air. On the last day of the May Day holiday, SF Express Holdings
announced that it had acquired another major company of intelligent express cabinets in
China -- EasyExpress.

"This is to expand and strengthen the main business of intelligent express delivery
counters, integrate high-quality resources in the industry, quickly seize the advantage of
the last kilometer of express logistics, and provide better service to couriers and
consumers," SF Express said in the announcement.

Statistics from the State Post Bureau show that 406,000 smart express boxes have been
set up in major cities across China in 2019, with a delivery rate of over 10 percent.
Among them, Fengchao has put 170,000 groups in total nationwide, and China Post
Express has put 94,000 groups in total. The number of laying of the two enterprises is in
the forefront of the industry.

Article 19 of China's Anti-Monopoly Law stipulates that "one of the following

circumstances can be presumed to have a dominant market position :(1) an operator's
market share in the relevant market has reached half; (2) The combined market share of
two business operators in the relevant market reaches two-thirds; (3) The combined
market share of the three business operators in the relevant market reaches three
fourths. Under the circumstances prescribed in sub-paragraph 2 and sub-paragraph 3 of
the preceding paragraph, any business operator whose market share is less than one-
tenth shall not be presumed to have a dominant market position."

After the merger of Feng Chao and EasyExpress, the two smart delivery cabinet
companies have a market share of 69 percent.

A legal source told the newspaper that FengChao's proposed fees may involve operators
abusing their dominant market position to monopolist, "but the details will depend on
whether there are any irregularities in the implementation process.
 Which type of market failure is indicated in the paragraph in Question 4? Explain why the market
failure occurred:

Point out that it is about monopoly market failure, because now more and more people
choose online shopping, online shopping at the same time, people have to choose a
place to sign for delivery, if each express delivery, this will greatly increase the burden of
Courier, so every city at a given location set to sign for fedex express box, which greatly
reduce the burden of the Courier. But at the same time, Hive Box monopolized other
express boxes and became the exclusive, resulting in a market monopoly.

What are the solutions you think can solve the market failure mentioned in Question 5? And explain
how they can correct market failure:

The country should set up the anti-monopoly law, forbids the enterprise to appear the
monopoly situation. Hive Box should avoid the acquisition of other express boxes, and
provide more channels for other enterprises' express boxes. Consumers should rationally
choose the way to sign for express delivery.