China’s domestic wine industry has long attracted outside capital. But in recent years, a quieter shift has been taking place: former import-focused players are turning inward, choosing to make wine at home rather than bring it in from abroad.
Some have gone big. Figures such as Zhang Yanzhi of Xige Estate have poured substantial capital into wineries across Ningxia and even Tibet. Others, however, are taking a very different route — opting for smaller, more flexible ventures built on partnerships with growers and existing production facilities.
Zhang Zhuonan — better known as Jack Zhang — belongs firmly to the latter group.
Once an Australian-based producer exporting wine to China, Zhang might have been expected to return to that business after punitive tariffs on Australian wine were lifted in 2024. Instead, he chose a different path. Over the past two years, he has shifted his focus to China’s domestic wine sector, launching the trend-driven brand Project Wines alongside a no- and low-alcohol label, No & Low.
It is a move that, at first glance, appears counterintuitive. China’s wine market is struggling: business-driven consumption is shrinking, while mass-market demand remains underdeveloped. Yet Zhang is not driven by sentiment. In conversation, he is strikingly pragmatic — even unsentimental — about the industry’s prospects.
“The market could stay like this for a long time,” he said. “And a lot of people waiting for a turnaround may not make it.”
From boom to collapse in Australia
Zhang’s journey into wine began in Australia, where he completed his education. After finishing high school in Melbourne, he moved to Adelaide to study winemaking — a deliberate choice.
“I liked wine, but I also wanted to do something different,” he said. “Most people around me studied business. Wine gave me a clearer identity.”
Entrepreneurial from the outset, Zhang entered the industry in 2012 and, within two years, had built his own winery. The model combined vineyard ownership with sourcing grapes and bulk wine, producing private-label wines tailored for Chinese clients.
The timing could hardly have been better.
Between 2015 and 2019, demand for Australian wine in China surged, supported by favourable tariffs under the China–Australia free trade agreement. Zhang’s business grew rapidly.
“In the first year, we shipped 12 containers. The next year, 60 to 70,” he recalled. “By 2018 and 2019, we were shipping around 550 containers a year — and still couldn’t meet demand.”
But the same forces that propelled the business upward would soon reverse.
The COVID-19 pandemic, followed by China’s anti-dumping and anti-subsidy investigations into Australian wine, effectively wiped out his orders in a matter of months.
“It was a classic black swan,” Zhang said. “But the real problem was that we were too concentrated — everything depended on China.”
The unwinding was abrupt: losses, liquidation, layoffs. A business built on momentum dissolved with equal speed.
Rebuilding — this time at home
Zhang’s second venture began at the end of 2022, just as China emerged from pandemic restrictions.
This time, the base was China itself.
With Project Wines, Zhang set out to produce domestic wines, marking a decisive break from his earlier reliance on international trade.
The experience of tariffs and geopolitical risk played a key role in that decision.
“It made me realise how vulnerable cross-border business can be,” he said. “Producing in China gives me more control.”
At the same time, he sees untapped potential in the country’s wine industry.
“There is still a lot of high-quality fruit waiting to be developed,” he said, pointing to Ningxia’s Helan Mountain East region, where infrastructure and supply chains are already well established.
“China is still developing, but in the RMB 100 to 200 price range, domestic wines can already compete on quality.”
A lighter way to make wine
The structure of his new business reflects a shift in mindset.
Where his Australian venture required capital — land, facilities, inventory — Project Wines operates more lightly. Grapes are sourced from growers; production is integrated into existing wineries.
“The advantage is flexibility,” he said. “If something goes wrong, you’re not locked in.”
There is also a learning curve.
“After coming back to China, I didn’t fully understand the local system,” he added. “This approach allows me to build relationships step by step.”
Wine, but not as we know it
The wines themselves reflect that shift in thinking.
Project Wines has released seven products so far, spanning red, white and sparkling styles. But it is the presentation — bold, colourful, almost cartoon-like labels — that sets them apart from the more traditional image of Chinese wine.
The tone is deliberate: relaxed, accessible, and easy to remember.
At this month’s China Food & Drinks Fair in Chengdu, the company plans to launch a semi-sweet sparkling wine made from Yunnan’s Niagara grape. Bottled in a 330ml, soda-style format and with just 6% alcohol, it is designed for casual drinking rather than formal occasions.
“Our direction keeps changing with the consumer,” Zhang said. “We started with more red wines, then moved toward whites. Now we are lowering alcohol and exploring wine-based drinks.”
In other words, less “fine wine”, more “everyday beverage”.
Just as important as the product is how it is sold.
Zhang is openly sceptical of traditional distribution models. Zhang speaks with particular clarity about distribution. The traditional model — reliant on personal networks, group buying and controlled pricing — no longer holds the same appeal.
“That model is disappearing,” he said. “Online channels are already mainstream.”
His focus is shifting toward instant retail — where consumers order online and receive products quickly through local delivery networks.
Over the next several years, he expects this to become central to how wine reaches consumers in China.
Rethinking what a wine business looks like
Zhang’s earlier identity as an “independent winemaker” helped build credibility, but it came with limits.
“It’s good for storytelling, but it doesn’t scale,” he said.
Now, the challenge is different: turning the project into a viable business.
His answer is to lean into “trend-driven” products — lower alcohol, faster to market, and more aligned with everyday consumption.
“It reduces costs, lowers prices and makes it easier to scale,” he said. “At the same time, using wine as a base still gives us some differentiation.”
A long winter for Chinese wine
Zhang is clear-eyed about the broader market.
China’s wine industry, he argues, is stuck between two phases: traditional business consumption is declining, while mass-market demand has yet to fully emerge.
“There’s no guarantee the market will just recover with time,” he said. “Many people may not last that long.”
Wine, he argues, has yet to secure a stable role in everyday drinking culture. Compared with other categories, it is both more expensive and more demanding — requiring a degree of knowledge that casual consumers may not wish to acquire.
“There are too many alternatives,” he said. “Wine is more expensive to drink in quantity, and harder for consumers to understand.”
For those in the industry, the path forward is narrowing.
“Either you go toward scale — with more accessible, trend-driven products — or you move upmarket, focusing on quality and margins,” Zhang said.
“The middle ground,” he added, “is the easiest to replace.”
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