From Pollution Crisis to Mongolia's Beauty Empire
When a Columbia University scholar with dual master's degrees returned to Ulaanbaatar in 2012, she couldn't breathe—pollution-induced allergies sent her to dermatologists who recommended natural products that simply didn't exist in Mongolia. Twelve days after opening her first office, thieves stole everything—her laptop, all recipes, every business plan—and she rebuilt from memory.
When Khulan Davaadorj (Хулан Даваадорж) returned to Ulaanbaatar (Улаанбаатар) in 2012 with dual master’s degrees from Columbia University and Germany’s Hertie School, she expected to build Mongolia’s (Монгол) renewable energy sector. Instead, she couldn’t breathe. The pollution that blankets Mongolia’s capital triggered severe skin allergies she’d never experienced during 15 years abroad. Dermatologists recommended mild, natural products—which simply didn’t exist in a market where 95% of cosmetics are imported.
Thirteen years later, Lhamour (Лхамур) employs 30 people, exports to 12 countries from a Los Angeles warehouse, and holds 90% of Mongolia’s natural skincare export market. The journey between those points involved theft, floods, payment processor rejection, and obstacles that don’t exist for entrepreneurs in developed markets.
Timeline
The Columbia Scholar Who Couldn’t Find Organic Soap
Khulan Davaadorj’s path to beauty entrepreneurship began as a 10-year-old contortionist performing in German circuses. Born in Ulaanbaatar, she spent her childhood as a “true nomad” across Europe—Germany, Switzerland, France—as her parents sacrificed everything to provide opportunities they never had.
Her academic achievements were remarkable. In 2011-2012, she became the youngest student to receive a 100% scholarship worth $90,000 to Columbia University’s School of International and Public Affairs, pursuing an MPA in International Energy Management alongside an MSc in Public Policy from Berlin’s Hertie School. She fulfilled her childhood dream of working at the United Nations in New York but quickly discovered bureaucratic environments weren’t her calling: “It was all paperwork!”
After Columbia, she returned to Mongolia in 2012 to work on the country’s first wind farm in the South Gobi desert. She had prestigious credentials, technical expertise, and a clear career path in renewable energy.
Then her skin started breaking out in rashes and eczema.
“I slowly started to develop allergies due to negative external effects such as air pollution, low water quality, and extreme climate, which was a great shock to me because I never had allergies,” she explains. Ulaanbaatar’s air quality ranks among the world’s worst—winter temperatures drive residents to burn coal and garbage for heat, creating toxic smog. The contrast with clean European air was immediate and devastating.
The dermatologist visits began. The recommendations were consistent: use mild, natural products with minimal chemicals. The problem? Those products didn’t exist in Mongolia’s market. Imported cosmetics dominated 95% of retail, and harsh chemicals designed for European or American climates didn’t account for Mongolia’s extreme conditions—temperatures ranging from -40°C to +36°C, high altitude, intense sun, and air pollution worse than Delhi.
Davaadorj had a choice: leave Mongolia again, accept synthetic alternatives that didn’t work, or solve the problem herself. Most people with Ivy League degrees would have chosen option one. She chose option three.
When Dermatologists Can’t Help, Enroll in Beauty School
In early 2014, Davaadorj enrolled in Formula Botanica, the world’s leading online organic cosmetic science school. For eight months, her kitchen became a laboratory. She experimented with traditional Mongolian ingredients her grandmother’s generation had used: wild sea buckthorn that thrives at -40°C, rosehip, nettle, sheep tail fat oil, yak milk. The renewable energy mindset that drew her to wind farms applied perfectly: “Both are using what mother nature has given us and producing end products that are both good for the body as well as the environment.”
The first batches were for herself. The rashes improved. The eczema faded.
“I created products at home suitable for my own skin, and it worked! Then I started giving out to friends and family with similar skin problems,” she recalls. The demand grew organically. People with pollution-induced skin issues wanted what she was making. Traditional ingredients—dismissed by international brands as too niche—actually worked better than imported products formulated for different climates.
By September 2014, she was ready to launch professionally. She secured her first office on September 1st. Initial product line: bath bomb, soap, lip balm—all formulated for Mongolia’s harsh climate and pollution challenges.
September 12, 2014: Everything she owned was stolen.
The Crisis That Nearly Ended Everything
Twelve days after opening her first office, thieves broke in and took everything. Her Columbia University laptop containing all business plans. Her handwritten recipes and formulations. Production notes. Financial projections. Supplier contacts. Customer lists. Nothing was backed up.
“Nothing was backed up, so I lost everything,” Davaadorj remembers.
She’d invested months of Formula Botanica training, eight months of kitchen experiments, whatever savings she had. All the intellectual property—the recipes that actually worked for pollution-damaged skin—vanished in one night. Most startups would have ended.
She rebuilt from memory.
The challenges compounded with brutal efficiency. Between 2015 and 2016, three major flooding incidents destroyed her basement production facility. Ulaanbaatar’s poor drainage meant knee-deep water that ruined equipment, contaminated ingredients, set production back weeks each time. During one flood, she posted a desperate Facebook plea for help. Within 30 minutes, 10 volunteers arrived—many were young people she’d mentored in renewable energy. “I was crying because of sadness but also happiness,” she shares.
Then PayPal rejected her business.
PayPal refused to allow Mongolian businesses to receive payments, only permitting outgoing transactions. Despite Davaadorj’s 2015 appeal highlighting Lhamour’s international awards, PayPal responded they would only reconsider “if online payment conditions improve to our standards in Mongolia.” This systemic barrier cost her numerous international customers who wanted to buy but had no way to transfer money.
The obstacles arrived in rapid succession: firing her first three employees due to cashflow issues, then being sued by one and fighting the lawsuit in court—all within her first month. She relocated offices four times. The renewable energy specialist starting a skincare company struck observers as absurd. “Basically, everyone thought it was the most stupid idea in the world,” she recalls.
Every founder faces obstacles. Not every founder faces obstacles rooted in developing market infrastructure beyond their control. Davaadorj couldn’t solve flooding through better design. She couldn’t force PayPal to recognize Mongolia. She couldn’t prevent thieves. She could only persist and trust that authentic solutions to real problems would eventually find their market.
From Skepticism to Forbes Recognition
Despite crushing setbacks, Lhamour emerged as Mongolia’s largest organic skincare brand. By 2017—three years after launching with three products and zero backup—the company produced over 100 products. The all-female workforce grew to 30 employees, with 10 women in production remaining over a decade. The company pioneered Mongolia’s first zero-waste corner for package-free products, first commercial use of recycled paper, first beauty brand with zero-waste production where every raw material becomes an end product.
The international recognition validated what skeptics had dismissed. July 2017: Forbes Mongolia named her to their 30 Under 30 list. That same year: “Most Responsible SME in Asia” award from Singapore’s MORS Research Institute—remarkable given Lhamour wasn’t yet profitable. The Prime Minister named her “Woman of the Year” in 2016. She ranked #85 among Top 100 Global Inspiring Social Enablers. Vital Voices Global Partnership selected her as a 2018 VV GROW Fellow.
The awards proved less important than what they signified: a renewable energy consultant’s “stupid idea” had become viable business solving real problems. The traditional Mongolian ingredients weren’t niche curiosities—they were competitive advantages international brands couldn’t replicate. The harsh climate that created skin problems also created potent botanicals adapted to extreme conditions.
Lhamour’s sourcing model created ripples beyond skincare. By partnering with 70+ small family-owned farms and nomadic herders, Davaadorj built supply chains providing sustainable income for marginalized communities. The company donates 10 cents from every sale to community programs, provides free dental care in suburbs, renovates children’s hospital sections. The all-female workforce specifically employs single mothers, housewives, and women from Ulaanbaatar’s Ger district.
The sustainability approach drew directly from renewable energy training. While other brands talked about sustainability, Lhamour built it into operational DNA: zero-waste production, recycled packaging including cow dung business cards, refill stations eliminating single-use containers, complete vertical integration from raw material to packaging.
Building Global Infrastructure From Ulaanbaatar
By 2025, Lhamour operates four flagship stores in Ulaanbaatar plus airport presence, with exports to 12 countries: United States, Hong Kong, Taiwan, India, Thailand, Canada, Singapore, South Korea, Australia, Japan, Kuwait, United Kingdom. US expansion includes Los Angeles warehouse for distribution, Amazon availability, partnerships with 70 North American retailers including placement at New York’s World Trade Center Oculus.
The company holds 90% of Mongolia’s natural skincare export market and 10% of the country’s overall skincare manufacturing. Revenue estimates range $1-9 million annually, though exact figures remain private as the company maintains bootstrap status with no venture capital backing beyond a small $41,180 bond issuance in 2017.
Recent recognition continues validating the model. In 2025, EY selected Davaadorj for their Entrepreneurial Winning Women Asia-Pacific program targeting high-potential women-led businesses. She spoke at November 2024 CACCI Conference in Singapore on “Sustainable and Resilient Business in Asia Pacific” alongside Asian Development Bank representatives.
Future initiatives include “Finding Your Passion” mentorship for teenagers and “Girls in STEM” encouraging female science careers—giving back to the next generation of Mongolian women who might face choices between leaving their country or solving its problems.
What a Health Crisis Taught About Market Opportunities
The transformation from Columbia scholar to kitchen experimenter to international beauty brand wasn’t linear or inevitable. It required surviving setbacks that would have ended most ventures: theft of all business materials, three factory floods, payment processor rejection, lawsuits, constant skepticism that a renewable energy specialist had no business making skincare.
But those obstacles revealed something critical: developing markets create entrepreneurship opportunities that developed markets can’t see. The 95% import dependence in Mongolia’s cosmetics wasn’t just a gap—it was evidence no international brand cared to formulate products for Mongolian conditions. The pollution crisis triggering Davaadorj’s allergies affected millions of Ulaanbaatar residents, but no one was solving it because the market seemed too small, too distant, too difficult.
The traditional ingredients grandmothers used weren’t backward—they were adapted to extreme conditions European or American formulators never encountered. Wild sea buckthorn surviving -40°C develops potency greenhouse-grown alternatives lack. Yak milk from animals roaming free offers nutrients factory-farmed equivalents can’t match. Sheep tail fat for winter skin protection works because it evolved for the same extreme climate humans inhabit.
Davaadorj’s renewable energy background proved perfectly suited: both fields require understanding natural systems, sustainable resource management, environmental respect. Her international education gave access to modern formulation science. Her Mongolian heritage gave access to traditional knowledge international brands couldn’t access. The combination created lasting competitive advantages.
The infrastructure barriers forced creativity well-capitalized startups never develop. When PayPal rejected Lhamour, the company built alternative payment systems. When flooding destroyed facilities, zero-waste philosophy turned constraint into marketing advantage. When international distribution seemed impossible, direct herder partnerships created supply chain stories luxury brands pay consultants millions to fabricate.
The pollution crisis that triggered allergies in 2012 affects millions across developing markets: Delhi, Jakarta, Lagos, São Paulo, hundreds of cities where urbanization outpaces environmental regulation. The infrastructure barriers she faced—payment rejection, flooding, limited logistics—are standard obstacles in emerging economies. The 95% import dependence mirrors dozens of sectors where developing markets consume foreign products because local production seems impossible.
What makes Davaadorj’s story significant isn’t that she overcame obstacles—it’s that she recognized them as opportunities. When dermatologists recommended products that didn’t exist, most people with her credentials would have moved back to Europe. She saw a market gap no international brand would fill because Mongolia seemed too small, too distant, too difficult.
Personal adversity becomes business opportunity when three conditions align: genuine problem affecting others, willingness to learn new skills, persistence through obstacles that rational analysis suggests should end the venture. Davaadorj experienced pollution-induced allergies millions shared. She enrolled in Formula Botanica despite zero beauty experience. She rebuilt after theft, survived floods, navigated payment barriers, ignored skeptics.
The result wasn’t just a successful company—it was creation of an industry where none existed. Lhamour’s 90% market share reflects first-mover advantage, but also demonstrates that developing markets contain entrepreneurial opportunities invisible to international corporations.
Thirteen years after returning with allergies and dual master’s degrees, Khulan Davaadorj employs 30 people, exports to 12 countries, holds 90% of Mongolia’s natural skincare export market. The kitchen experiments that started as personal necessity became business showcasing Mongolian botanicals, nomadic traditions, and cultural heritage to global clean beauty markets.
The pollution still blankets Ulaanbaatar eight months each year. But now millions of residents have access to skincare formulated for their conditions, using ingredients adapted to their climate, created by someone who experienced their problems firsthand. That transformation—from personal crisis to market solution—is replicable anywhere entrepreneurs choose to solve problems others ignore.