Shinsegae DF, the duty-free arm of the county’s second-largest retailer Shinsegae, reached an agreement with a duty-free store in Hainan, China to supply Korean products for five years, the firm said Friday.

This is the first time for the company to enter the Chinese market since Shinsegae DF was established in April this year.

The exclusive contract was made prior to the opening of the Hainan Provincial Duty Free Co.’s new shopping mall at Mission Hills Resort in Haikou, Hainan Island, set to launch by February.

The affiliate of the Hainan provincial government currently operates three duty-free shops.

“By making a foray into the Hainan Provincial Duty Free Store, we built an infrastructure that enables Korea’s small and medium-sized enterprises to export their more goods,” Shinsegae DF CEO Sung Young-mok said.

The company said the deal is a major milestone for further expansion into international markets.

The duty-free shop will house a 4,000-square-meter hall only for Korean products where some 50 cosmetics and fashion brands will be displayed. The size of the Korean hall accounts for 20 percent of the shop, which spans 20,000 square meters.

China has been trying to promote the region as an international tourist destination. The central authority has allowed tax-free policies, tax refunds after departure and visa exemptions for tourists from 26 countries, as part of measures to encourage tourism in the province.

Due to the unique duty-free policy exclusive to Hainan Province within China, Chinese shoppers are able to make duty-free purchases of up to 8,000 yuan ($1,260) twice a year.

By Park Han-na (hnpark@heraldcorp.com)