ANALYSIS: Price cutting is not the only solution

Indeed, there's nothing like an aggressive challenger to get the competitive juices flowing and marketing skills sharpened.

It's this kind of competition - not just a lowering of prices to outlast rivals - that Chinese industry needs. And it appears to be finally happening in Shanghai's beer market where home-grown brew Reeb and Japanese rival Suntory have been crossing swords in the battle for market leadership.

What makes the Reeb-Suntory joust particularly interesting is that the battle strategy appears to have moved beyond the usual price reductions favoured by so many businesses in China - and indeed Asia - when confronted by a worthy competitor.

The two brands have employed a wide array of weapons in their arsenal - from specially-brewed products to expanding the distribution network and finally cut-through marketing communications to build up a connection with their beer-drinking audience - in the battle to score valuable points.

Would any of this happened had Suntory not burst on the scene four years ago to steal market share from the market leader? Probably not. Without a nimble and astute challenger like Suntory to give Reeb a run for its money, the Chinese brand had little impetus to offer the market what it wants - a lighter brew - much less to rev up its staid brand image or target a new and younger drinking segment. Reeb's bounce-back has naturally cost Suntory a few points in market share but that again is a good thing as the latter prepares its next move, with a new media agency to whip its media strategy into shape.

For other up and coming Chinese brands, the Shanghai skirmish is another demonstration that classic brand building, rather than ruinous price reductions, is the only way to grow a brand's market value.