The introduction of steep U.S. tariffs on low-value shipments from China and Hong Kong has pushed a Hong Kong-based watch company to shift its business strategy, turning its focus from America to Europe.
Quinn Lai, founder of the DIY Watch Club, which specialises in do-it-yourself timepiece assembly kits, saw the writing on the wall when the U.S. announced it would end duty exemptions for small packages from China and Hong Kong. Beginning May 2, these items are now subject to a hefty 90% tariff or a \$75 flat fee under escalating trade tensions between Washington and Beijing.
With over 80% of the brand’s sales previously going to the U.S., Lai said the policy change dealt a major blow to his operations. He estimated that the move could wipe out between 20% and 30% of his U.S. revenue.
“If nothing changed, we were facing the possibility of cutting down operations, or worse, shutting down altogether,” Lai explained.
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As the tariffs took effect in April, Lai quickly pivoted, doubling down on his marketing efforts across Europe. He ramped up social media campaigns and sent product kits to influencers in the region for promotional unboxings.
Lai said he chose Europe over Southeast Asia due to stronger e-commerce performance in the region. “We spent hours testing different countries in Europe to see which markets responded best,” he said.
Thanks to this shift, the company grew its European market share from a mere 6% to roughly 30%. While the U.S. remains its largest single market, now contributing about 50% of revenue, Lai says the business is less reliant on it than before.
Looking ahead, he plans to further strengthen the company’s European presence and explore new markets like Japan to diversify even more.
Kennedy Wong, honorary president of the Hong Kong Chinese Importers’ and Exporters’ Association, acknowledged the broader impact, saying the tariffs have severely disrupted cross-border e-commerce. Products typically shipped in small packages have been particularly affected, and according to Wong, “No single market can truly replace the United States.”
In response to the new U.S. import rules, Hong Kong Post has halted mail services for goods bound for the U.S., while couriers still handling such shipments now require prepayment of American tariffs, Wong added.
