Shinsegae and Doosan are scheduled to open their new duty-free shops in Seoul on Wednesday, driving up competition among Korean duty-free businesses that target foreign shoppers, mainly the Chinese.

Duty-free stores are a rare bright spot in Korea’s sluggish retail sector, growing by an average 20 percent over the past five years. Last year, they posted a combined 9.2 trillion won ($8 billion) in sales.

Retail giant Shinsegae will open its first duty-free store inside its main department store in central Seoul, near Namdaemun Market and Myeong-dong, one of Korea’s most popular tourist hotspots.

It has so far secured a number of global luxury brands including Gucci, Saint Laurent, Bottega Veneta and Moncler for its new store, with efforts underway to bring in top luxury houses like Hermes, Chanel and Louis Vuitton.

Shinsegae’s new tax-free store is poised for fierce rivalry against Lotte’s main duty-free shop nearby in Myeong-dong — a key driver of Lotte Group’s retail business as well as Korea’s most profitable tax-free store.

Bent on retaining its leadership, Lotte Duty Free has been working to expand its store by 20 percent by adding a new floor, with plans to complete the renovation by July.

At the same time, Doosan will open a new duty-free shop in Doota, its shopping mall complex near Dongdaemun Market, a popular shopping destination in Seoul. The Korean industrial giant has sought the lucrative duty-free business in pursuit of a new growth engine.

Doosan has tapped actor Song Joong-ki, who starred in the hit Korean TV series “Descendants of the Sun,” as the main model for its new duty-free shop. Given the show’s immense popularity in China, Doosan expects Song to help promote its new store.

The other three newly licensed duty-free stores — Hanwha Galleria in Yeouido, HDC Shilla Duty Free in Yongsan and SM Duty Free in Insa-dong — have already begun operation.

Last month, Shilla set a milestone by becoming the first among the new duty-free stores to secure participation from global luxury powerhouse LVMH Moet-Hennessy Louis Vuitton. The operation of such big-name luxury brands is considered crucial for local duty-free operators in attracting high-end spenders at home and abroad.

Meanwhile, the Korea Customs Agency plans to issue four new duty-free licenses in Seoul this year to meet growing demands from Chinese tourists. The capital city currently has nine tax-exempt retail outlets.

Major retail giants such as Lotte Duty Free, SK Networks of SK Group and Hyundai Department Store have vowed to engage in all-out efforts to win business licenses.

Lotte and SK, in particular, are eyeing a second chance to return to business after failing to renew licenses for shops that they had been running for years.