If Mohammad can’t go to the mountain…

People build apps for various reasons. Some do it for sheer entertainment, some just want to show that they can. There are also those who want to build a great product, and others who want to make a statement.

Shen Guyi, co-founder and CEO of LobangClub, certainly belongs to the latter category. ‘Lobang’  roughly means ‘deals’ in Malay, and the LobangClub app has a simple aim — help Singaporeans find a good deal.

But he’s not running another daily deals company. In fact, Guyi is an e-commerce unbeliever, at least for Singapore and Southeast Asia. He believes that good ol’ brick and mortar stores are here to stay for a while.

His app is designed to make physical stores even more attractive by giving users a more efficient, community driven way of comparing prices.

So, how does it work? Suppose I want to purchase a $300 point-and-shoot camera from a department store. Before I do so, I would use the app to scan the barcode on the product packaging.

The app will then bring up a list of different prices from various locations, and perhaps I might find a cheaper price for the same camera model in an adjacent shopping mall.

LobangClub claims to have the prices of over 40,000 products in Singapore, with more added by the community as they discover new ‘lobangs’. Effectively, he’s bridging the online retail and physical world by connecting shoppers with an army of ‘lobang’ hunters.

Such a concept isn’t new. Singapore’s largest telco SingTel has the Price Pal app for Android that does the same thing. In the US, ShopSavvy and RedLaser (which was acquired by eBay) have already achieved millions of downloads.

Since LobangClub’s launch, they have done pretty well, beating Groupon to become the number one free Lifestyle app on iTunes App Store in Singapore. So LobangClub certainly has potential to do well in the Asian market, especially since physical stores are still dominant.

As he sees it, e-commerce in Singapore and Southeast Asia has been relegated to “bitpart status”, and hasn’t been quite as disruptive as in the US.

While online platforms like LiveJournal, The EZ Suite, and TackThis, as well as shops like Household.sg, SingPets, and various blogshops have been making the news, ”The fact that an e-commerce store is newsworthy [in Singapore] suggests the lack of a viable ecosystem at present,” he argues.

There are many reasons for this.

Urban areas in Southeast Asia tend to be densely populated, such that brick and mortar stores become rather convenient options. Rural areas, on the other hand, lack the infrastructure to provide cheap and reliable shipping and also online payment methods.

Further, the retail sector in Southeast Asia has lower overheads than in US and Europe, which means stores have less incentive, in terms of cost savings, to migrate online. And since established e-commerce stores in the US and Europe have a global reach, they’re effectively stunting the growth of e-commerce in Southeast Asia by cannibalizing the market.

Lastly, e-commerce stores in the region lack significant venture capital to disrupt pricing, says Guyi. He cited how Amazon lost plenty of money before they finally turned profitable.

What all these means is that physical stores will continue to dominate the Southeast Asian retail scene for the short to medium term. Anecdotally, it’s hard to disagree with him.

Owning a brick and mortar store continues to be an attractive proposition in Singapore, even though rentals can be costly. While many fashion blogshops start online, some of the more successful ones eventually set up their own stores (there’s the online-only camp, of course).

While the impending closure of the Borders bookstore in Parkway Parade may signal that large chain bookstores have had their heyday; smaller, independent stores are still thriving (read this and this).

The physical store, in other words, is still king, and this gives apps like LobangClub an opportunity to flourish.

The problem though is that brick and mortar distribution channels are inherently inefficient. With no price transparency, customers end up purchasing products from whichever retail store that is most convenient to them.

So, what his app does is to give consumers more information to make the right purchasing decisions. To fulfill his vision, he is currently looking for seed funding to further develop LobangClub.

“We want to index everything in Singapore and Southeast Asia; we want to be the de facto place where you check with before you purchase anything,” he says.

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