Business / Tech

Tokyo startup offers QR code app for those who want to shop like Michael Jackson

by Pavel Alpeyev

Bloomberg

In the 2003 documentary “Living With Michael Jackson,” the late King of Pop was filmed shopping for art and furniture in a Las Vegas store, pointing at things he liked and walking out, leaving his handlers to settle the bill.

A startup in Japan is trying to make that retail experience a reality for everyone.

Primo’s app lets users skip the checkout line by using their smartphone. A scan of a QR code instantly completes a purchase. The eight-person startup is betting that businesses will sign up for the service. Since debuting in October, Primo has attracted 90 merchants in Japan, including a craft chocolate maker, the preferred tea brand of the Imperial family and high-end audio-equipment maker Bang & Olufsen.

“You don’t have to be a billionaire to shop like this,” said Abasa Phillips, founder of Tokyo-based Primo Inc. “A lot of companies are working on optimizing the register, but the problem is the 10- to 15-minute wait before the purchase.”

While it may seem like online shopping is taking over retail these days, e-commerce is still just a fraction of in-store sales, accounting for less than 10 percent of merchandising in the United States. That fact hasn’t been lost on Amazon.com Inc., which in December unveiled a concept store that will let shoppers grab groceries and leave without having to go through a checkout line or scan them at all.

Primo argues that its QR tags are cheaper and easier to deploy, and can be read by any smartphone camera. While QR codes aren’t that common in the U.S. and Europe, they are everywhere in Japan, China and other parts of Asia. Promoted by Tencent Holdings Ltd.’s WeChat messenger, the tags were quickly picked up by China’s tech giants Alibaba Group Holding Ltd. and Baidu Inc., used for everything from sharing contacts to paying for taxi rides.

“Most tech companies tend to want to use the newest thing out there, so they kind of skipped over this use case for QR codes,” Phillips said at an interview at the company’s office in Harajuku, Tokyo’s youth fashion district. “You really see the potential in China, where every store, every product and every business card has a QR code on it.”

The 40-year-old Phillips, originally from Philadelphia, has lived in Japan for more than a decade, working in personal wealth management and digital payments. He was an early bitcoin adopter and started a virtual-currency wallet service, which stumbled when the Tokyo-based Mt. Gox exchange collapsed in 2014.

Primo tested the QR technology in a 24-hour pop-up shop earlier this month, offering about 20 brands and products ranging from environmentally friendly detergent to organic tea and sake. The company takes 10 percent of each transaction, including credit card fees.

“It seems very convenient, and I like their product selection,” said Darren Yeo, a 28-year-old tourist from Singapore. “The downside is you still have to download the app.”

In December, the app was featured on Product Hunt, a U.S. online bulletin board for early adopters of new apps, services and gadgets. Primo is now looking to raise $1 million in a seed-funding round to speed up integration with online merchants and expand into the U.S. One way or another, Phillips is betting that someday, everyone will shop like Michael Jackson.

“The shopping experiences on mobile is still quite clunky, and the reason is because it’s completely separate from payment,” Phillips said. “We bring it closer to one tap and you’re done.”

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