VPN demand booms ahead of ban on TikTok and WeChat

Demand for virtual private network (VPN) software increased in the U.S. over the weekend as users of TikTok and WeChat realized President Donald Trump could block their access to Chinese-made apps over national security concerns, CNBC reported.
TikTok and WeChatVPNs allow users to conceal their location online and pretend to be somewhere they’re not. Chinese citizens use the software to access Facebook and Google, which are blocked by the Chinese government. U.S. citizens could use a VPN to try to bypass a government block on TikTok or WeChat.

VPN market size has exceeded $25 billion in 2019. VPN revenue is forecast to grow at more than 12 percent CAGR between 2020 and 2026. The VPN market growth is due to increasing adoption of private network services across various industry verticals.

Enterprises are seeking new security solutions to safeguard their transactions conducted on the internet, driving the demand for VPN solutions.

Daniel Markuson, digital privacy expert at NordVPN, told CNBC that NordVPN has seen more interest than normal from U.S. citizens since the announcement of the ban on TikTok and WeChat on Aug. 6.

“Expecting a TikTok ban to go into effect on Sunday, people rushed looking for VPN more actively: this weekend alone inquiries from the U.S. surged by 34 percent,” Markuson said in an email. NordVPN declined to give exact figures but said it has 14 million users globally.

Rival firm ExpressVPN has also seen an uptick in interest. Harold Li, vice president of ExpressVPN, told CNBC:  “We saw a 20 percent increase in traffic to our website from the U.S. following Trump’s initial announcement of a potential TikTok and WeChat ban in early August.”

A spokesperson for Surfshark, another VPN provider, said the company saw a notable uptick in free trials. “Comparing last weekend (12-13 Sept.) to this weekend (19-20 Sept.), we reported a 38 percent surge in free trials.”

Incognito VPN saw a “huge spike” over the weekend. “Some users in the U.S. are worried if I can’t access TikTok or WeChat maybe now I have to use VPN in the U.S. to access other apps in China which is really, really ironic,” Edith Yeung, a general partner at venture firm Race Capital, said.

Last Friday, the Trump administration said TikTok would be banned from U.S. app stores from Sunday. However, on Sunday, Trump gave his “blessing” to ByteDance’s deal with Oracle that will allow TikTok to keep operating in the U.S.

Under the deal, ByteDance will retain 80 percent of a new TikTok global business, which will be headquartered in the U.S. Oracle and Walmart will have a 20 percent stake.

Over the weekend, a California judge temporarily blocked a U.S. Department of Commerce ban on WeChat just hours before it was due to come into action.

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