RETALIX LTD.

Direct Sales
Our direct sales force, consisting of experienced account managers, technical pre-sales engineers and sales personnel in the field, are located in the
United States, United Kingdom, South Africa, Italy, France, Australia and Israel. Our sales force sells our products directly to supermarkets, convenience
stores and fuel retailers and distributors within these countries and also relies on trade shows, promotions and referrals to obtain new customers.
Marketing Alliances
In 2001, we joined IBM Corporation’s independent software vendor, or ISV, business partner program designed to promote marketing partnerships
between independent software vendors and IBM. We work with IBM on several large accounts, primarily in the U.S. convenience store market, and are
evaluating possible collaborative opportunities in Europe and in the Asia-Pacific region. We are included on IBM’s ISV partner list.
In October 1997, we entered into a global marketing partnership program with NCR for our convenience store products. Under this agreement, we
became an NCR Global Solutions Partner, which allows our StorePoint product line to be promoted by NCR in the worldwide convenience store sector.
Dealer Sales
We have direct distribution agreements for the sale of some of our products with partners in Australia, China, Finland, Greece, Japan, Korea, New
Zealand, Norway, the Philippines, South Africa, Switzerland and the United States. Some of these partners operate regionally in countries in addition to the
country in which they are headquartered.
We believe that qualified partners can be an effective sales channel for our products in their respective markets and can help us to overcome
language and cultural barriers in countries where English is not the native language. We intend to continue to recruit partners and distributors in countries
where we have identified sufficient sales potential and a suitable market profile.
Competition
Our principal competition in the supermarket and grocery market for in-store solutions has traditionally come from integrated IT vendors such as
IBM, Fujitsu, NCR and Wincor-Nixdorf (which usually provide their software integrated with their hardware), as well as local or regional software
providers. On the enterprise level, after our acquisition of TCI Solutions, our principal competitor in the supermarket and grocery market is
SoftTechniques, as well as in-house developed solutions. We also experience competition from both independent retail industry focused software vendors
such as JDA, and from larger ERP software companies such as Oracle (which recently acquired Retek and Profitlogic) and SAP (which recently acquired
Triversity). In addition, we anticipate future competition from new market entrants that develop retail food software solutions. In the convenience store and
fuel market, our competition includes Radiant Systems Inc., Pinnacle Systems, Gilbarco, VeriFone Inc. and Wincor-Nixdorf. In the supply chain execution
and warehouse management markets, our competition includes Manhattan Associates, Red Prairie and EXE Technologies (part of SSA Global
Technologies). Some competitors, such as NCR, Wincor-Nixdorf and IBM, are also our marketing partners in several market sectors or locations.
The market for retail food and fuel information systems is highly competitive and subject to rapidly changing technology. We believe that the
primary competitive factors impacting our business are as follows:
breadth of product offerings;
integrativity of solutions and solution components;
suitability for multi-national, multi-concept retailers;
quality track record;
established reputation with key customers;
products that balance feature/performance requirements with cost effectiveness;
scope and responsiveness of professional services and technical support;
retail and business know-how and expertise;
compatibility with emerging industry standards;
ease of upgrading and ease of use; and
timeliness of new product introductions.
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