South Korea's customs office said Thursday that one of the country's leading department store chains, Hyundai Department Store, has won the license to operate a duty-free shop in downtown Seoul.

Hyundai Department Store, the sole candidate, was picked to operate the duty-free outlet at Dongdaemun, northeastern Seoul, according to the Korea Customs Service. The site was previously operated by conglomerate Doosan Group,

Hyundai Department Store has operated a duty-free shop at its Trade Center branch in the affluent Gangnam Ward in southern Seoul since 2018.

"We plan to stabilize the duty-free business by bringing a synergy effect by operating two outlets in both southern and northern Seoul," said a company official who asked not to be named.

Earlier this month, Hyundai clinched a five-year deal to rent the duty-free shop site from Doosan for 10 billion won ($8.5 million) per year.

Hyundai Department Store said it plans to officially open its Dongdaemun outlet by the first quarter of next year.

The duty-free shop business is suffering an industrywide slump, mainly because the number of Chinese tourists has fallen sharply since late 2016 due to a diplomatic row with Beijing over the installment of a US missile defense system in South Korea.

In 2015, seven companies, including retail giants HDC Shilla Duty Free and Hanwha Galleria Timeworld, vied for four licenses to open duty-free shops in Seoul and the southeastern port city of Busan.

But this year, Hanwha Group and Doosan Group decided to pull out of the duty-free business by closing down their Seoul outlets amid growing losses and heated competition. (Yonhap)