onal economy. Thailand’s malls are more than just shopping centres; they are also lifestyle attractions. These massive facilities, from Bangkok’s Siam Paragon to Chiang Mai’s Central Festival, have become critical to the country’s economic engine. They are part of a planned strategy to boost retail sales, attract domestic and international customers and merge traditional culture with modern commerce. IconSiam, for example, exemplifies the fusion of Thai culture with contemporary retail experiences. It integrates traditional Thai design elements, such as the use of gold motifs and traditional Thai architectural styles, into its modern structure. It also hosts Songkran (Thai New Year) celebrations and offers an indoor floating market. The combination of old and modern has an impact on retail growth in Thailand. It enables malls to attract not only wealthy Thais and foreigners, but also tourists looking for an immersive cultural experience. Tourism is a major driver. Malls are frequently included on travel itineraries, and airlines and tour operators advertise them as must-see sites. The retail sector’s growth is also closely tied to Thailand’s tourism industry. Nikkei Asia showed earlier this year that tourism contributed around 18 per cent of the country’s GDP by 2024. Thailand hosted 35 million foreign tourists last year, nearly matching the record 39 million it hosted in 2019, the year before the pandemic. The rise of retail hubs Thailand’s retail landscape has experienced major developments in recent years, with several new shopping malls opening across the country. Luxury shopping destination Emsphere opened in 2023. Part of The Mall Group’s EM District, it features Thailand’s first Ikea city store concept in Bangkok. In November 2023, Central Pattana launched Central Westville in west Bangkok with an investment of THB6.2 billion (about $186 million). The mall is a semi-outdoor project that combines nature and the convenience of living in a city. In addition, One Bangkok Retail, which opened last year, is part of a THB120 billion ($3.5 billion) integrated district at the corner of Wireless Road and Rama 4 Road. The development features more than 160,000sqm of retail space, featuring luxury fashion brands, concept stores, and a 20,000sqm event centre for concerts and exhibitions. It aims to attract at least 90 million visitors annually. The distinctive combination of contemporary luxury and cultural heritage lies at the core of Thai retail strategy. Malls like EmQuartier in Phrom Phong, with its futuristic architecture and vertical gardens, or Terminal 21 in Asok, which models each floor after a different global metropolis, demonstrate a conscious effort to draw in customers with experiences as well as products. Thailand has a wide variety of shopping options, including shopping malls, community malls, department stores and outlet malls. Central Pattana, Thailand’s biggest developer of enclosed vertical malls, manages 42 shopping centres (including 40 Central-branded shopping malls, of which 16 are in greater Bangkok). “Extreme temperatures and poor external pedestrian infrastructure have always made vertical, air-conditioned malls the most important retail platform in Southeast Asia,” Michael Baker, a Thailand-based retail consultant and former head of research at the International Council of Shopping Centers, shared with Inside Retail. “No country illustrates this better than Thailand, and no company exemplifies it better than Central Pattana. While Central Pattana and its large competitors in Bangkok – Siam Piwat and the The Mall Group – serve a distinct ‘global city’ market, Central also has an extensive portfolio in the provinces and is, therefore, more important to the average Thai consumer outside the capital, which is 75 per cent of the population.” The country is also witnessing a sweeping transformation: the rise of mixed-used malls that seamlessly blend commerce, culture, work and lifestyle into one architectural experience. These are not just malls, they are ecosystems. Several mixed-use developments across Bangkok are either under way or recently completed. Central Pattana has revealed its “Pioneering Growth & Beyond” vision, which includes investing THB120 billion (about $3.5 billion) over five years (2025-29) to construct a new CBD in Bangkok as well as mixed-use developments across the country. The company said this would boost its economic growth and propel Bangkok and Thailand to worldwide prominence. It intends to open The Central on Phaholyothin Rd in Q4 2026, establishing a new central business district in northern Bangkok. This construction, which spans 78,400sqm and includes 460,000sqm of retail space, will complement Central Ladprao and create a new vital commercial center. “The Central Phaholyothin will be a landmark similar to CentralWorld, where global brands will open their flagship stores as they enter the Thai market. Additionally, we have further development plans in the pipeline to continue driving growth in the district,” said Chanavat Uahwatanasakul, president of retail and development at Central Pattana. With a vision to promote urbanisation and generate statewide economic growth, Central Pattana is pushing Thailand’s most comprehensive mixed-use projects across all areas, which will open in 2025-26: Central Northville is Nonthaburi’s largest mixed-use development; the province’s second project, Central Khonkaen Campus, is strategically located near educational and healthcare facilities; Central Chiangmai Airport is a 208,000sqm enhanced master plan featuring a convention hall, tourist hub, multi-generation space, and the North’s first Go Wholesale; Central Phuket is a 20,000sqm luxury zone (THB3 billion investment – around $90 million); and Central Krabi will open in October 2025.  Challenges ahead Thailand’s shopping malls appear to be emblems of success. Sleek buildings, trendy shopfronts, and bustling food courts all indicate success. In Bangkok, a city known for its world-class malls, the skyline has long been dominated by enormous commercial complexes rather than office skyscrapers. Behind the glitz and glamour of the city’s major shopping malls, however, challenges are simmering beneath the surface. The digital revolution has irrevocably altered consumer shopping behaviours. Last year, Thailand’s e-commerce market grew 14 per cent, year on year, with revenue hitting THB1.1 trillion in 2024, compared with THB980 billion in 2023, The Nation reported. Thai consumers are increasingly turning to online platforms like Lazada, Shopee and TikTok Shop for everything from fashion to groceries. Malls can no longer rely on traditional retail alone, as customers now expect a seamless journey. They want to browse online, try on in-store, pay via mobile and return items anywhere. Modern consumers, especially from younger demographics, seek more than just shopping; they desire experiences, and the concept of ‘phygital’ retail – a seamless blend of physical and digital shopping – has gained traction. “Through the integration of technology, such as interactive displays and augmented reality (AR) try-ons, retailers can deliver immersive experiences that captivate customers,” CBRE Thailand said in its ‘Retail landscape evolution: Phygital retail’ report. “Additionally, QR codes, mobile apps and real-time data collection help brands gather valuable insights into personal customer behaviour and preferences, enabling them to optimise their phygital strategy for maximum impact.” CBRE has stated that this approach allows customers to browse products online, check in-store availability and make purchases through various channels. Understanding generational preferences is crucial, as older consumers may prefer tactile, in-store experiences, while younger shoppers lean towards digital interactions. “The challenges for mall operators are the same as they are everywhere: making sure there is enough reinvestment in properties to keep them looking vibrant and up to date,” Baker added. In addition, Thailand’s retail real-estate market faces an oversupply issue. The overall retail space in Thailand is estimated to reach around 8.3 million sqm this year, The Nation reported. This influx exacerbates competition among malls, and the abundance of retail space also challenges mall operators to differentiate themselves and attract both retailers and consumers. A report by JLL in February stated that Bangkok’s prime retail vacancy rate increased by 5 basis points, quarter on quarter, to 4.7 per cent in Q4 2024. Positive drivers, such as the peak tourist season and government stimulus-induced rise in private consumption, were counterbalanced by supply pressures. The oversupply issue is forcing mall operators to reconsider their strategy. To stay competitive, many businesses are investing in renovations and asset-enhancement projects to attract and keep renters. However, several older malls are losing tenants as a result of ongoing renovations, showing the issues that properties confront when they do not meet market needs. “And renovations cost a lot of money (keep in mind that construction costs have been rising sharply), so you have to do them cyclically, and you need a big balance sheet. Not every company has the wherewithal financially to do as much as they would like in that regard,” Baker noted. “The other thing, of course, is ensuring the tenant mix is appropriate, which also means a lot of pop-ups to keep things fresh and a lot of emphasis on local designers/retailers.” The question for developers is no longer how many malls Thailand will need, but what types of malls the Thai people will choose. This story first appeared in the May 2025 issue of Inside Retail Asia magazine.