Bidders for the country‘s duty-free licenses sweetened their offers Monday to pull ahead in the neck-in-neck competition as they battle with existing operators.

Four companies have submitted bids for the operational licenses of three duty-free stores in Seoul, which are set to expire later this year. The result is slated for next month.

Shinsegae’s duty-free unit said it plans to invest 53 billion won (US$46.8 million) in the next five years to create a “tourism cluster” in downtown Seoul and collaborate with small shop owners in a nearby traditional market.

Shinsegae proposed a duty-free shop at its department store in Myeongdong, a major shopping district, which is also close to Namdaemun traditional market.

“Our investment is aimed at creating a tourism cluster in a bid to attract more travelers and help Seoul better compete with tourism destinations overseas,” Chung Young-mok, the chief of Shinsegae DF, said in a press briefing. “We proposed the shop in downtown to offer convenient options to foreign travelers.”

On the same day, Doosan Group, a construction and machinery conglomerate, also announced plans to invest in a foundation designed to revitalize Dongdaemun area, the nation‘s largest fashion district, located in downtown Seoul.

Doosan and its chairman, Park Yong-man, will each invest 10 billion won in the foundation, which was widely seen as efforts to raise its chances in the upcoming bid.

Doosan proposed a duty-free store in its fashion shopping mall in the Dongdaemun area, named Doosan Tower.

Dongdaemun is the second most visited shopping district by foreigners after Myeongdong and is crowded with shoppers hunting for designer clothes at cheap prices.

Doosan Tower is also close to Dongdaemun Design Plaza, the newest landmark designed by world-renowned architect Zaha Hadid.

“We acknowledge that the media interprets this foundation as being linked to our duty-free bid,” Park told reporters after the foundation’s launching ceremony. “I won‘t deny that I want (this investment) to help our bid.”

Lotte Duty Free, the nation’s No. 1 operator, is trying to renew the licenses of two stores, while SK Networks Co., a trading and hotel unit under SK Group, wants to keep its shop in the Sheraton Grande Walkerhill Hotel in the southeastern part of the capital.

While the existing operators announced plans to upgrade their current facilities to appeal to the customs officials, new contenders are focusing more on their efforts to enhance the tourism infrastructure adjacent to their shops.

Lotte faces an uphill battle to keep two of its duty-free licenses despite its strong brand power as the world‘s No. 3 duty-free operator after a bitter succession feud between the founder’s two sons hurt the retailer‘s image and rising criticism over its monopoly in the lucrative sector.

Last year, the six duty-free stores across the capital, mostly dominated by Lotte, posted combined sales of 4.4 trillion won.

Sales by a Lotte Duty Free branch in Myeongdong accounted for a whopping 45 percent of the total. (Yonhap)