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Oligopolies are markets where only a small number of enterprises know that their price and output policies are interdependent. A small number of competitors gives each business a competitive advantage.

Oligopoly has the following characteristics:

1. The market share is held by only a few companies.

Although there are hundreds of suppliers, oligopolistic markets can persist even if the top five have a combined market share of more than 50%. To put it another way, the market is heavily controlled by a few big sellers.

Due to the fact that the E-Wallet in Malaysia does not require the actual card for transaction, only 53 companies are available in Malaysia for use. The GrabPay, for example, has a market share in the country despite the fact that there are just a few companies involved.

2. There are a lot of hurdles to get started.

A variety of entrance limitations help oligopolistic firms hold on to their dominance. Issues such as customer devotion to a certain brand, patent infringement, and high startup expenses might all occur. It is difficult for newcomers to establish themselves in the market and attract new clients because of these difficulties.

A small number of companies will be able to generate more money if the market is not overrun by new entrants, which is why Malaysia has placed restrictions on how many new businesses can join the market.

3. There is a mutual reliance among the firms

A firm's actions have a considerable impact on its competitors in an oligopolistic market. As a result, the 'Prisoners Dilemma' exists in Game Theory. A firm's behavior is determined by how it believes its competitors will respond to it.

Consequently, a market that is very competitive may not be as potent as it may be. Given that the competition is also selling at the same price, they are unlikely to experience a rise in demand. For the most part, oligopolies prefer to maintain the status quo and maintain present prices.

Because of this, in Malaysia, GrabPay E-Wallet and WeChat Pay may elect to lower their costs and maintain their present price levels.

4. There is little market power for each company.

Because of this interdependence, no single company has much sway over the market. Due to competition from the WeChat E-Walet, an oligopolistic corporation like GrabPay in Malaysia cannot raise its prices. One corporation cannot control prices or supply in an oligopolistic market since its rivals are just as dominant. So, in a personal sense, it keeps the firm in check. Because no one company has a foothold, it encourages collusion because no one company has a presence in the market

5. The is efficiet

Oligopolies benefit from a company's portion of the market. At the same time, they are able to manufacture at a lower cost because of economies of scale. A good example of this is the GrabPay E-Wallet market in Malaysia, which has large fixed expenses. Creating new businesses and bringing in new competitors takes a lot of money.

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