The Canadians selling bottled air to China
China’s air pollution problem is so bad that Canadians are exporting air from Alberta to China, but the question remains: should they?
Just the Basics:
Canadian company Vitality Air is selling bottled air from Alberta to consumers in China
China’s dismal air quality has created an entire market for various air pollution related services and products
Bottling Canadian air is just the latest incarnation of an economic trend of exporting natural resources with little to no added value that snakes throughout Canadian history
At first glance it sounds like one of those joke gifts for sale at the dollar store, but the concept of exporting bottled air to China is a real, tried and tested business model. In fact, the idea for the business actually started as a joke, according to Vitality Air co-founders Moses Lam and Troy Paquette. “We looked at a bottle of water, and we said ‘Hey, we want to try something fun,’” explains Lam. “We want to do something fun and new - let’s try bottled air instead of bottled water.”
Lam and Paquette initially began selling Canadian air in zip lock bags on eBay - the first one sold for 99 cents, but the second went for an eye watering $168. Still recovering from this surprise, Lam and Paquette believed they had stumbled upon something. Four years later, the company that the they founded in 2014 - Vitality Air - was on track to sell 500,000 units of bottled air in 2018, up from 40,000 in 2017. Gone are the zip lock bags, as the company now drives a truck and air compressor to remote alpine locations for days at a time to meet demand. While Vitality Air markets its products (which include bottled oxygen, spray mists and scented airs) to a wide range of potential clients - gamers, athletes, office workers - the company has found many of its customers coming from China.
Taking a page from Fiji Water’s play book - the company touts the purity of Fijian water while marketing its water as a lifestyle choice - Vitality Air decided to capitalize on the universal acclaim that is heaped upon the crisp mountain air that swirls around famous Canadian tourist attractions Banff and Lake Louise. At thirty dollars a bottle, Vitality Air has found a following among both luxury goods consumers as well as ordinary Chinese citizens coping with the everyday reality of living in China’s polluted cities.
With regards to the first demographic, Vitality Air has benefited from international media coverage, with most outlets banking on the guffaws this business idea engenders to pull in audiences. Just as there is no such thing a bad publicity, Vitality Air has capitalized on the viral nature of its product, benefiting just as much from serious purchasers as from bemused individuals venting their exasperation (the company was widely panned during its 2015 appearance on Dragons’ Den) by sharing news of the company with all their friends. It is important to note that while Vitality Air seems like a joke for many of us - and one cannot but see hints of the company’s genesis as a joke in the fact that it is selling $10,000 diamond studded air bottles (you can even get a limited edition bottle signed by rapper 2Chainz for twice that price) - the fact that it has found success among Chinese consumers demonstrates that a real market is indeed being served here.
China’s air pollution is so bad that selling air finds a ready market
With our clean air, we Canadians take breathing easily for granted - and take umbrage at the idea of paying for said air - but for many Chinese urbanites, clean air has become a commodity worth paying for. China is home to some of the world’s most polluted cities, and some 1.6 million Chinese die from air-pollution related illnesses each year. Globally, air pollution ranks as the fourth most common cause of death - behind only smoking, high blood pressure and diet. In cities such as Beijing, the appearance of a blue sky is a newsworthy event, especially since “Chinese scientists have warned that toxic air pollution [in Beijing] is now so bad that it resembles a nuclear winter.”
This state of affairs has seen a host of entrepreneurial schemes emerge to take advantage of the pollution crisis; including, designer face masks taking the stage at Chinese fashion shows. China has also rapidly become the largest air purifier market, having surpassed the United States in 2014. Growing air purifier demand and China’s rising middle class have also led to a diversification in consumer options, with high-end, boutique air purifiers (setting you back some $2,000) becoming status symbols akin to other expensive electronics and appliances, among China’s upwardly mobile cohort.
Pollution related public unrest is one of the largest drivers of discontent in China and the Chinese government is keenly aware that environmental degradation harbours the seeds of the government’s undoing, not only directly by destroying the country’s vitality, but as the catalyst for public outrage. As such, the Chinese government has made tackling air pollution a major policy concern. For instance, work in Beijing came a halt and many factories in surrounding areas were shut down before and during the 2008 Olympics to ensure decent conditions so as not to embarrass the nation with the world’s media in town. In a similar vein, IBM and Microsoft have partnered with China on pollution forecasting technologies, with the former working with the city of Zhangjiakou - the co-host of the 2022 Winter Olympics - on air quality modelling.
Chinese urbanites are fully aware of the severity of the air pollution problem, with the domestic, independent pollution documentary Under the Dome garnering over 100 million views within forty-eight hours of being released before it was banned back in 2015. More recently, Beijing has moved to clamp down on practices which draw undue attention to the air pollution situation. One such victim of the Chinese government’s sensitivity about air pollution have been independent air quality monitoring apps, which often display far higher pollution readings than official sources. Several years ago, a spate of insurance companies were admonished for offering pollution-related services, such as hazard pay for travelling to polluted cities. The People’s Insurance Company of China (PICC) used to offer smog insurance, which promised a ¥1,500 ($240) payment if clients were hospitalized due to air pollution.
Various Chinese travel companies also offered pollution-themed package deals, with ‘escape the smog’ offers marketed to the residents of the nation’s polluted metropolises: one restaurant in Zhangjiagang even added a clean air surcharge to diners’ bills for having partaken of the establishment’s air filtering system. With Chinese consumers already willing - and needing - to pay for pollution related services and products, the appeal of Vitality Air’s bottled Canadian air becomes readily apparent.
Bottled air joins Canadian bottled water in heading to China
The reality of China’s air quality means that there truly exists a viable market for such seemingly perplexing products as bottled air. At one time the concept of bottled water elicited similar responses, but has since grown into a multi-billion dollar industry. While it is unlikely that bottled air will follow a similar growth curve, bottled air from Canada now joins bottled water from Canada as a growing export: the Chinese bottled water market is growing by twenty percent annually on average.
Canadian water has already caught the attention of Chinese investors, with many of the same statements which Vitality Air uses to describe its products - purity, cleanliness, wholesome - being attributed to Canadian water. Just as some are looking to cater to the desires of China’s rich with boutique air from Canada, so too are others looking to market Canadian bottled water as a lifestyle choice. “Canada is famous for its rich and clean fresh water which is very cheap and suitable to develop bottled water business,” notes Yuan Zhanling, former economic and commercial advisor to the Chinese consulate in Vancouver. “Canada often leaves Chinese consumers an impression as resourceful, natural and clean, which is an advantage of bringing Canadian bottled water to the market with vast needs, especially the emerging high-end water market [sic].”
As a result, an increasing number of Chinese investors are looking to Canadian water sources as prime investment opportunities. Water Canada reported back in 2015 that two Chinese businessmen had already purchased two water sources in British Columbia, with a third reportedly spending $17 million on a water source in Chilliwack, BC. Speaking to Water Canada, Vancouver immigration consultant Alex Liao noted that he had Chinese clients willing to spend at least $20 million to purchase wells in British Columbia. “One of my clients is exporting [...] 200 container loads of mineral water from British Columbia every month,” recounts Liao. In September 2016, Whistler Water Inc. accompanied PM Justin Trudeau to the G20 summit in China, where the company signed a substantial agreement to promote, market and sell Canadian water in China.
With ninety percent of China’s groundwater sources and seventy-five percent of its lakes and rivers polluted, the country unfortunately represents the largest potential market for bottled water, as some 700 million Chinese drink contaminated water each day. As such, Agriculture and AgriFood Canada noted in February 2017 that:
“China’s demand for bottled water will continue to increase over the coming years and their bottled water market will almost double through 2019. Canadian bottled water exports to China have grown significantly over the last five years, although the supply gap is also growing. As such, there are significant opportunities for Canadian bottled water producers to expand in the Chinese market.”
The Bottom Line
The fact that two Canadians are able to run a viable business selling bottled air to China highlights the distressing nature of that country’s pollution crisis. From eBay joke to export journey, Vitality Air demonstrates that just because its products elicit guffaws at home does not mean there are not millions of potential customers in China already paying for pollution related services, willing to purchase Canadian air.
That being said, it is not beyond reason to envision an eventual backlash against imported bottled air, for the Chinese government has already cracked down on other pollution-based offerings in its effort to control the narrative about the country’s pollution. Independent pollution tracking apps, smog insurance, and pollution-themed travel promotions have all felt Beijing’s ire in recent years: the importation of air from a foreign country surely constitutes an equally embarrassing situation for the Chinese government.
Whereas companies like Vitality Air are capitalizing on the appalling environmental situation in China, they - like their bottled water brethren - are also symptomatic of a broader trend within Canada’s economic outlook; namely that of commodity-centric thinking. Canada has long been an exporter of raw materials and natural resources, and this sector continues to play an important role in our nation’s economy. The (oft remarked upon) problem is that when presented with such a bounty, we are liable to forgo other options and simply ship our natural resources overseas. Bottled water and especially bottled air are only the latest incarnations of this tendency; namely exports with little to no added value.
Canada has much to offer China and the world, with our country’s natural beauty and pristine wilderness a major selling point: surely there are better ways to share these with the world than sticking them in a disposable bottle.