Why a free point-of-sale service might finally give Japan’s Recruit an overseas hit

Although Recruit became a Japanese conglomerate worth nearly US$2 billion on the strength of its human resource services, it could be an unassuming point-of-sale (POS) product that gives the firm a strong presence in Southeast Asia and around the world. Until now, nearly all of Recruit’s overseas operations have been localized versions of its landmark HR service. After seeing AirRegi quickly gain more than 100,000 businesses in its first year, the company is betting that similar success can be found outside Japan.

Premiering in November 2013, AirRegi was hatched by Recruit’s lifestyle subsidiary (aptly titled Recruit Lifestyle) to be a one-stop shop for small-and-medium sized business owners looking to manage their inventory and sales. While services like Square or Coiney mainly provide credit card payment processing features, AirRegi seeks to manage everything else related to small business sales whether you are at a computer in the office or using a tablet in the store. That means product orders, customer payments, and sales records. In the event that someone pays with a credit card, the transaction can be recorded easily enough but the processing will need to be done separately. It can be customized for restaurants so staff can keep track of each table’s charges.

To shore up its blind spots, AirRegi has partnerships with Square Japan, as well as Freee and MoneyForward, both of which offer accounting software favored by small businesses. Adding to its appeal is the price. The service is completely free for either Android or iOS versions. Nothing freemium. The company does not even get a cut of your transaction fees. It is just free.

More functions for a lower price adds up to a sales pitch that tallied over 40,000 registrations in its first four-and-a-half months. Growth slipped slightly thereafter, but it still added a further 60,000 in its next eight. Although requested, figures for monthly active users were not disclosed.

The growth rate will likely rise in the coming months. Last week, Recruit announced that AirRegi’s Android version is now available in 134 countries.

Starting with no experience

When AirRegi was first being developed, it seemed unlikely that it would reach such a point. “The fact that our only engineers were people who had never used a POS register for business was the biggest challenge,” Hidenori Omiya (executive officer) and Saeka Tani (international business development lead) tell Tech in Asia. The team had to start from scratch, visiting and interviewing store owners in order to understand how to construct the right user experience.

A tough challenge, but one with considerable resources behind it. The engineering team alone had about 200 members. On the business side, Tani estimates that roughly 2,000 people are involved. Keep in mind that the entire staff of Recruit Lifestyle AirRegi is 2,537. When Recruit builds a new product, they don’t start small.

That is not to say that all 2,000 people are focused on selling the product. Recruit Lifestyle also houses the conglomerate’s travel, ecommerce, and dining marketplaces, so many of those employees are introducing AirRegi as part of their regular tasks focused on those other services.

A global strategy in a small package?

Tani claims that synergy is a major advantage that AirRegi has over competitors. Payment-related services need business partnerships to survive. AirRegi can lure Square, MoneyForward, and Freee because it can link them up with all the businesses already connected to the Recruit brand.