6 in 10 Know About India’s Growing Ghost Mall Problem

A recent report by Knight Frank India paints a concerning picture of the country’s retail landscape, with a growing number of small malls succumbing to vacancy and becoming “ghost malls.”

To understand public awareness and potential solutions, a Real Research survey was conducted. The responses could offer valuable insights and tell us about the changing habits of Indian consumers and the future of retail in the country.

Key Findings:

• 60% were aware of the Knight Frank report on the rise of ghost malls in India.
• Nearly 38% believe the increased preference for online shopping is the primary factor contributing to ghost malls.
• Attracting retailers with incentives (25%), marketing and promotions (20%), and repurposing the spaces (16%) are seen as potential solutions to ghost malls.

The Rise of Ghost Malls in India

The latest report by Knight Frank reveals that the number of ghost malls in India increased to 64 in 2023 from 57 in 2022. Ghost malls, also known as zombie malls or dead malls, are mall properties with low footfall and a vacancy rate of over 40%. These ghost shopping malls are characterized by large, empty retail spaces that have failed to attract tenants or customers.

The survey findings show that over two-thirds of respondents (68.18%) were familiar with the term “ghost malls.” Similarly, 60% were aware of the specific Knight Frank report.

The Reasons Behind the Ghost Shopping Malls

Diving deeper, the survey explores the reasons behind the mall exodus. Here, online shopping emerges as the dominant culprit. Nearly 38% believe the increased preference for online retailers is the primary factor.

Economic factors impacting consumer spending came in a close second (32%). The rest (30%) felt changing attitudes towards recreational venues played a major role.

Do We Love Online Shopping Too Much?

The survey also confirmed a personal connection to the online shopping phenomenon, with nearly 59% admitting to shopping online more due to its rise.

But how much blame should online shopping truly shoulder? While 31% felt the rise of e-commerce was a major contributor, over half (52%) believed it played a somewhat significant role.

Is Demolition the Only Option?

The financial repercussions of the rise of ghost malls in India are substantial. The report estimates a loss of a staggering $798 million, prompting the question – what’s the cure for this retail haunt?

The survey reveals a diverse range of proposed solutions. Offering incentives to attract retailers (nearly 25%) and investing in marketing and promotions (20%) are seen as potential remedies. Repurposing these spaces for alternative uses, such as residential areas or office spaces, finds favor with over 16% of respondents.

Additionally, collaboration with online retailers (over 14%) is seen as a way to bridge the gap between the physical and digital worlds. Finally, some (over 12%) advocate for a more permanent solution – demolishing and redeveloping the areas for entirely new ventures.