Most customers live in big cities in the north-east and south of the country, where severe pollution warnings are common.
Last week Beijing issued a red alert for pollution that forced half of its cars off the road.
Xinhua, the state news agency, posted a picture online of the city centre barely visible under a thick soup of smog yesterday.
The Canadian company is not the first to sell fresh air to the Chinese.
Last year, Liang Kegang, a Beijing artist, fetched the equivalent of pounds 512 for a glass jar filled with air collected during a business trip to southern France.
In 2013, Chen Guangbiao, a multimillionaire, sold fizzy drink-sized cans of air purportedly taken from less industrialised regions of China for 5 yuan (50p) each.
Mr Lam admitted that he started Vitality Air as a joke when he and Troy Paquette, his co-founder, filled a plastic bag of air and sold it for less than 50p on the auction website eBay.
A second bag sold for US$160.
"That's when we realised there is a market for this," he said.
Vitality Air sells bottled fresh air and oxygen across North America, to India and the Middle East. But China has quickly become its biggest overseas market.
The company's representative there, Harrison Wang, says their customers are mainly affluent Chinese women who buy bottles for their families or to give as gifts.
But he says old people's homes and even exclusive night clubs have also stocked up on the product.
"In China fresh air is a luxury, something so precious," said Wang.
A number of distributors had contacted them to sell their products, he added. Vitality Air's biggest challenge is to keep up with demand, because each bottle is filled by hand.
"It's very labour-intensive but we also wanted to make it a very unique and fun product," said Lam.
"We may have bitten off more than we can chew."
