A well-known do-it-yourself watch brand from Hong Kong has been hit hard by new U.S. trade rules. The company, famous for selling watchmaking kits to customers overseas, used to send most of its products—over 80%—to the United States. But everything changed when Washington announced higher tariffs and scrapped a rule that allowed small packages from Hong Kong and China to enter duty-free.
As of May 2, even low-value packages are now slapped with a hefty 90% tariff or a flat fee of $75. This sudden rise in costs has made it much harder for the brand to keep its prices competitive in the U.S. Customers are now facing much higher prices, leading to fewer sales. The company estimates that these new rules will cut its revenue from the U.S. by 20% to 30%.
Feeling the pressure, the brand’s founder feared the worst. He worried that if things didn’t improve, the company might have to shrink its operations or even shut down entirely. The trade war between the U.S. and China has created a tough environment for small businesses like his, especially those that rely on sending lots of small packages across borders.
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DIY Watch Brand Targets New European Customers
When the tariffs started hitting in April, the company knew it had to act fast. Rather than wait for things to get better, it decided to look for new markets outside of the U.S. Their choice? Europe.
The DIY Watch brand quickly shifted its marketing efforts, spending more money on ads targeted at European countries. They also sent their watchmaking kits to online influencers in Europe, who unboxed them and shared their experiences with their followers. This helped spread the word quickly and brought in new customers from places like Germany, France, and the UK.
Why Europe? According to the brand, European countries tend to perform better in online shopping compared to other regions like Southeast Asia. The team behind the watch kits put in long hours testing which European countries responded best to their ads. It was a detailed and hands-on effort, but it paid off.
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Europe Becomes the New Growth Engine
Thanks to these quick actions, the DIY Watch brand has seen its market share in Europe jump from just 6% to around 30%. This is a huge leap in a short period of time. Even though the U.S. is still its biggest market, accounting for about half of the company’s revenue, the growing European customer base has made the brand less dependent on America.
At the same time, challenges remain. Cross-border e-commerce from Hong Kong has been heavily impacted by the new U.S. tariffs. Many small businesses that send goods in small packages have been caught in the middle. Hong Kong’s postal service has even suspended mail services for goods headed to the U.S., making it harder and more expensive to ship products. Some couriers still willing to deliver require sellers to pay the U.S. import taxes upfront, adding more strain on businesses.
Despite these hurdles, the brand’s ability to quickly pivot to Europe has helped soften the blow from the tariffs. By focusing on new markets and using smart online marketing, it has managed to stay afloat during a difficult time for many exporters in Hong Kong.
