A woman rides a scooter through an arcade at the Burakuri-cho shopping area in Wakayama, Japan. (Photographer: Tomohiro Ohsumi/Bloomberg)

Japanese Shoppers Race to Empty SoftBank's $88 Million Handout

(Bloomberg) -- Shoppers in Japan are racing to see who can spend Masayoshi Son’s money the fastest.

The tech billionaire and SoftBank Group Corp. founder has triggered a shopping frenzy by promising to give away 10 billion yen ($88 million) in rebates to users of PayPay, a new digital payment app released by a subsidiary of the mobile carrier. The campaign offers 20 percent off purchases at select retailers, while SoftBank subscribers get another 1-in-10 chance to receive the whole amount back. Discounts are capped at 100,000 yen per transaction.

The marketing campaign, offering bargains at the height of the Christmas shopping season, has ignited a rush to electronic retailers such as Bic Camera Inc., with long lines reported across the country according to social media accounts and observations by Bloomberg reporters in Tokyo. Gleeful users have been showing off everything from Mac laptops to Sony TVs and Nintendo Switch consoles bought at deep discounts through the app since the campaign began on Dec. 4.

“Bought an iPad Pro with PayPay and my parents bought a (Microsoft) Surface, and we both got all our money back. Our luck is too good!" wrote one Twitter user. “I finally figured out why Bic Camera has been so packed,” wrote another, attaching a screenshot of 100,000 yen rebate after spending 104,544 yen.

Shares of Bic Camera have outperformed the broader Topix index by 15 percent since the campaign was announced on Nov. 22. Others supporting PayPay include convenience store operator FamilyMart UNY Holdings Co., electronics retailers Yamada Denki Co. and Joshin Denki Co., and travel agent operator HIS Co.

Japanese Shoppers Race to Empty SoftBank's $88 Million Handout

PayPay has been the No. 1 most-downloaded app on Apple devices throughout the country every day since the campaign began, according to data researcher Sensor Tower. It was launched in partnership with Yahoo Japan Corp. and India’s largest digital-payments company Paytm, which supplied the Quick Response payment technology.

SoftBank wants to use the new Japan venture as a launchpad to take the service global, Bloomberg News reported in July, citing people familiar with the matter. Yahoo Japan and Paytm count SoftBank as one of their biggest investors.

QR codes have become the de facto standard for electronic payments throughout Asia, but have mostly failed to catch on in Japan as the homegrown Felica electronic money technology has been in use since 2004. In July, the government formed a special council to promote QR payments and accelerate digital payment adoption in Japan, with the nation’s biggest banks and companies including Amazon.com Inc. now rushing to implement services.

PayPay’s campaign runs until March 31, although users on Japanese social media sites have already begun guessing when the 10 billion yen could run out. Others have speculated about the profitability of buying items through the discounts and re-selling them online for higher prices.

SoftBank declined to comment on how much has been spent on the marketing blitz so far or how long the campaign will run for.

©2018 Bloomberg L.P.