What: In India, an increasing number of malls are left in the dust, with high rates of vacancy.

Why it is important: Just like China, India is poised to challenge the traditional notions of retailing as we know them.

India's retail landscape is grappling with the challenge of increasing vacancies in small malls, highlighted by the rise in "ghost malls" – properties with over 40% vacancy. Knight Frank's report indicates that the number of ghost malls has increased from 57 in 2022 to 64 in 2023, with a projected 132 small malls at risk despite a significant expansion in retail space in major cities. The financial implications are severe, with a potential loss in sales reaching 6,700 crore rupees.

This trend underscores a deeper shift in consumer behaviour and the viability of traditional mall models. Christian Westphal of SilverSpoon Consultancy points to a transformation in consumer expectations, where young shoppers prioritize self-expression and seek value and authenticity, influencing their loyalty and spending habits. The challenge for retailers and brands is to adapt to these new consumer demands by enhancing personalized services and improving brand storytelling.

The issue is compounded by many malls' failure to attract this critical demographic, due to poor design, lackluster management, and an uncompetitive brand mix. Westphal emphasizes the necessity for malls to innovate and for sales teams to effectively represent their brands, aligning in-store experiences with online narratives to maintain consumer trust and satisfaction.

The situation calls for a strategic rethink in the mall industry to align more closely with evolving consumer preferences and market dynamics, ensuring relevance and sustainability in the changing retail environment.

What the rise of ghost malls says about India’s changing retail landscape