CO-NECT, invested in by Headline Asia in June 2022, runs a B2B order and supply system, revolutionizing conventional order management in Japan.

Today, the most common way to place and receive orders is still quite conventional. CO-NECT utilizes a web-based order and supply system that solves the problems of both parties: those who place orders by fax or phone, and those who receive orders but have trouble processing order forms. CO-NECT’s error-free and hassle-free order and supply system reduces the workload for both sides by digitalizing the entire process. In the summer of 2021, the total number of products circulated by CO-NECT exceeded 15 million because of the efficiency its services provide.

For this article, Headline Asia Partner Akihiko Okamoto spoke with Yusuke Taguchi, CO-NECT’s representative, who discussed CO-NECT’s history, services, and future.

The start of B2B’s order and supply system

Akihiko Okamoto: There are still many people who are not familiar with CO-NECT’s services, could you please explain what they are again?

Yusuke Taguchi: In a nutshell, it is a b2b order and supply system. It is a system that makes it easy to digitize transactions between companies, which until now have been placed and received by relatively conventional ways such as fax, telephone, and e-mail.

AO: The company name was originally HIDEOUT CLUB, could you tell us what led to the change to the current name, CO-NECT?

YT: I was originally managing a community application for bar and whiskey lovers, and at that time I had many opportunities to talk with people from bars, restaurants, and retail stores, and I heard that they were still placing orders by fax, which was quite time-consuming and troublesome. It was then I realized that although I was not familiar with fax machines in the IT industry, they were still being used in society.

We began to think that if we could digitize this area, we would be able to grow as a company. On top of that, we decided to enter the market because of the enormous social changes that were taking place.

AO: HIDEOUT CLUB and CO-NECT are completely different in nature. Even though there might be competitors, you went ahead and entered the market because you see the demand and digitalization have yet to come.

YT: That’s right. There were competitors, but I thought there were still a lot of opportunities. I did research before entering the market to see if there were many strong competitors, but I found that this was not the case. I entered the market as I believed it would be a great opportunity. However, some people were thinking the same thing as us, and several new competitors emerged at the same time (laughs).

AO: When you entered the market, you were trying to digitize faxes, or to support digitization while using faxes, but since then, your products have evolved, and your target customers have also broadened. What kind of issues are you currently trying to resolve for your customers?

YT: We would like to eliminate the unnecessary tasks that are created by conventional ordering and receiving, and we aim to make CO-NECT a product that facilitates B2B transactions to go faster.

Communication between companies occurs before, during, and after the ordering and receiving of goods, as well as during the payment, all of which are still a conventional process and quite time-consuming. They are also complicated and tiresome, and because such problems exist, we would like to speed up the process by taking everything online.

Superior UI and customizability

AO: People who are not accustomed to digital products before will still be using digital products in their business, therefore simplifying the UI/UX becomes necessary.

On the other hand, CO-NECT is not a vertical service, so I think you may need to consider the balance between simplification and making it usable in all industries. Otherwise, it may be oversimplified and can only be useful to a single industry but not to another. How did you overcome this problem?

YT: [I overcame this with ] UI/UX. The element our clients appreciated the most was the UI. Although our products are designed with a simple UI, they are equipped with many functions, and we make things flexible for clients to select and use these functions as they wish.

AO: It is easy to customize [features with your product] even without professional knowledge, so it is very easy to use, no matter what industry you are in.

YT: As you said, even for a single CSV output item, the client has the freedom to choose the order and which items to output.

For product information, there are items that are necessary for some industries but not for others. Clients can add or cut back on the number of items, and edit the names of items themselves.

A self-reproductive service with good network effects

AO: Your project was aimed at small and medium businesses at the beginning. Now you’ve increased your client base. Have your clients changed, in terms of business size?

YT: There are still many SMBs, but we have also attracted larger companies.

AO: The great thing about CO-NECT’s service is that it is a self-reproductive product. I think the network effect works well for CO-NECT. Often, large companies started using CO-NECT because the small and medium-sized companies they do business with are using it.

YT: Yes. We are receiving an increasing number of inquiries from companies whose business partners are using CO-NECT. We have [successfully] signed contracts with some of these companies, and the number of inquiries is increasing rapidly.

Basically, most of the inquiries we receive are inbound and we are steadily taking care of them.

More about CO-NECT

In the second part of this interview, we’ll be exploring more about CEO Yusuke Taguchi, the company mission, and the story behind the “friendly technology” that the team focuses on. Check it out here.

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*This article was translated from Japanese and edited for clarity.

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