The Shopping Mall industry in India is poised for significant transformation in 2025, driven by changing consumer behaviours, technological advancements, and a renewed focus on experiential retail. Once seen as mere shopping destinations, Malls are now evolving into community & lifestyle hubs offering entertainment, dining, and leisure engagement. Backed by insights from leading research firms like Deloitte , McKinsey & Company , and KPMG , the outlook for Indian shopping Malls in the coming year reflects immense opportunities and adaptability to modern retail trends.

Malls are the modern temples of the community and shall continue to attract consumers from all walks of life.

The Current State of Shopping Malls in India

As of 2024, India is home to more than 750 operational Shopping Malls, with a combined area of over 200 million sq. ft. According to Knight Frank, the Indian Mall industry is expected to grow at a CAGR of 12-15%, reaching USD 39 billion by 2025. This growth is driven by rising urbanization, growth in infrastructure, increasing disposable incomes, and the demand for organized retail spaces.

Tier 1 cities like Delhi, Mumbai, Bengaluru, and Hyderabad continue to dominate the Mall landscape, but Tier 2 and Tier 3 cities are also emerging as the next growth frontiers. According to JLL, 40-45% of new Mall developments in the next two years will take place in smaller cities, where aspirations are high, and the demand for premium shopping experiences is rising.

Experiential Retail: The Heart of Modern Malls

The concept of experiential retail is redefining shopping Malls. Malls are no longer just about shopping—they are becoming lifestyle destinations that cater to diverse needs, including entertainment, food, wellness, and community experiences. Research by McKinsey highlights that 70% of consumers now visit Malls primarily for experiences beyond shopping, such as dining, movies, gaming zones, and fitness centers.

Leading Malls like Select CITYWALK n Delhi, Phoenix Marketcity in Mumbai, Sarath City Capital Mall, Hyderabad and LuLu Malls India in Kochi are pioneering this trend by offering curated experiences such as:

• Themed entertainment zones for families and children.
• Dining clusters with premium food courts and gourmet restaurants.
• Wellness spaces, including fitness centers, spas, and yoga studios.
• Cultural events such as music festivals, art exhibitions, and community gatherings.
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The Rise of Destination Malls

The future of Malls lies in creating destination experiences. Destination Malls are large-scale retail developments that attract visitors from across regions by offering unique experiences under one roof. Deloitte’s report suggests that destination Malls contribute to higher footfalls, longer dwell times, and increased spending.

For example, Mall of Asia in the Philippines and Dubai Mall serve as global benchmarks. Indian developers are taking inspiration from these success stories. Malls like DLF Mall of India, LuLu International Shopping Mall and Texvalley, Erode, are integrating world-class retail, entertainment, and hospitality to position themselves as destination hubs.

Technology Transforming the Mall Experience

Technology is playing a pivotal role in enhancing the Mall experience for both retailers and shoppers. Smart technologies such as AI, IoT, and AR are enabling Malls to become more efficient and customer-centric. According to KPMG, the integration of digital solutions can increase Mall revenues by 10-12%.

Key technological trends include:

• Smart Parking Solutions to reduce wait times.
• AI-driven analytics to track consumer behaviour and optimize store layouts.
• Augmented Reality (AR) for virtual try-ons and interactive experiences.
• Contactless Payments and digital kiosks to enhance convenience.
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Furthermore, Malls are adopting phygital strategies that blend physical and digital experiences. Retailers within Malls are leveraging technologies such as QR codes, personalized mobile notifications, and click-and-collect services to enhance the omnichannel shopping journey.

The Growth of Malls in Tier 2 and Tier 3 Cities

Tier 2 and Tier 3 cities are emerging as the backbone of Mall development in India. A report by JLL indicates that these cities will account for 50% of Mall-based retail growth by 2025. Factors such as increased urbanization, rising disposable incomes, and a demand for premium shopping experiences are fuelling this trend.

Cities like Lucknow, Indore, Jaipur, Surat and Coimbatore are witnessing a surge in new Mall developments. Even tier 3 & 4 towns like Thanjavur, Erode, Purnea, Bhagalpur, Siliguri, Asansol, Kuttiadi, Ahmednagar, Madurai, etc are catching up with the metros, by adding modern Malls in their towns.  Developers are localizing their offerings to cater to regional tastes, with vernacular branding, localized events, and a mix of national and international brands that appeal to aspirational consumers.

Sustainability: A Growing Imperative

Sustainability is becoming a critical focus for shopping Malls in India. Research by Deloitte reveals that 65% of Indian consumers prefer visiting Malls that adopt sustainable practices. Malls are responding by implementing initiatives such as:

• Green building certifications (LEED, IGBC).
• Energy-efficient designs to reduce power consumption.
• Rainwater harvesting and waste management systems.
• Solar energy adoption to minimize carbon footprints.
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Developers who prioritize sustainability are not only reducing operational costs but also enhancing brand reputation and attracting eco-conscious consumers.

Challenges and Opportunities

Despite the positive outlook, the Mall industry faces challenges such as rising operational costs, competition from e-commerce, and changing consumer behaviors. However, the opportunities far outweigh these hurdles. The ability of Malls to adapt to experiential retail, embrace technology, and cater to smaller cities will define their success in the coming years.

Way forward…

Shopping Malls in India are on the brink of a transformative era. As they evolve into experiential, tech-enabled, and sustainable destinations, Malls will continue to play a pivotal role in the country’s retail ecosystem. Backed by insights from leading research firms, it is evident that destination Malls, Tier 2 and Tier 3 city expansions, and technology adoption will drive the industry forward.

Currently, the forecasted pipeline of Grade-A retail Mall projects amounts to about 18 million square feet for the 2024-2027 period. With India’s Mall industry expected to grow to USD 39 billion by 2025, the future looks promising. Malls that embrace innovation, customer-centric experiences, and sustainable practices will emerge as the leaders of this exciting new phase of retail growth in India.

In the next 5 years, India would add another 200+ Malls and about 60 million Sq. Ft. In terms of investment, India's Mall sector is expected to attract over ₹30,000 crore (approximately $3.5 billion) in the next 3-4 years.

As the iconic movie character “Pushpa” says… “Jhukega Nahin”… keep growing.