Dhaka's Shopping Malls Are Losing Their Shine. What Is Really Happening to the City's Retail Economy?

 

Something unusual is happening in Dhaka's retail market. Shopping complexes that once attracted thousands of customers are struggling to keep their businesses alive. From Karnaphuli Garden City in Kakrail to Eastern Plaza, Rapa Plaza, Sezan Point, Hosaf Tower, Fortune Shopping Mall, Twin Tower and several others, concerns about declining business are becoming increasingly difficult to ignore.

Karnaphuli Garden City's closure is particularly alarming. A complex that once housed 198 shops reportedly had only 25 operational before shutting down. Meanwhile, businesses in other established shopping destinations are expressing concerns about declining sales, fewer customers and uncertain futures.

But is this simply a shopping mall crisis? I don't think so. It reflects something much bigger happening within Bangladesh's economy.

1. People are spending differently because their purchasing power has changed.

Inflation has made everyday life more expensive. Groceries, housing, education, transportation and healthcare consume a larger portion of household income. Naturally, people become more selective about discretionary purchases.

A family that previously bought clothes, shoes, cosmetics and accessories regularly may now prioritise groceries, utility bills and savings. Shopping becomes an occasional activity rather than a lifestyle.

The problem is particularly serious for retailers selling imported, premium and nonessential products.

2. Running a retail business has become increasingly expensive.

Imagine a shopkeeper paying rent, salaries, electricity, service charges and other operational expenses every month. Now imagine sales declining by 30 or 40 percent while most expenses remain unchanged.

How long can that business survive?

Eventually, owners start using personal savings, borrowing money, reducing inventory or closing their shops. Karnaphuli Garden City's reported financial difficulties demonstrate how declining occupancy can eventually threaten an entire commercial property.

3. Dhaka may have more retail space than its economy can comfortably support.

For years, shopping complexes were considered attractive property investments. But constructing a shopping mall and creating a successful shopping destination are two completely different things.

A building can have hundreds of shops, beautiful interiors and an impressive location. Without sufficient customers and profitable tenants, however, it is just commercial space.

The closure of Karnaphuli Garden City should make developers reconsider whether Dhaka really needs more shopping complexes or better managed existing ones.

4. Consumer behaviour has changed, but many retailers have not adapted.

Today, customers can compare prices, explore products and purchase from Facebook, Instagram and e-commerce platforms without leaving home.

Online shopping is not the only reason traditional markets are struggling, but it has changed customer expectations. People increasingly value convenience, competitive pricing, product authenticity and reliable delivery.

Retailers who still depend entirely on walk-in customers are exposing themselves to unnecessary risks.

5. Accessibility and shopping experience matter more than ever.

Traffic congestion, parking difficulties, road construction and inconvenient access can discourage customers from visiting established shopping destinations.

Karnaphuli Garden City's decline was reportedly accelerated by flyover construction that disrupted customer access. Some established businesses relocated and never returned.

Once customers develop alternative shopping habits, bringing them back becomes difficult.

6. Shopping malls need to rethink their business models.

A shopping complex cannot survive indefinitely by collecting rent and service charges. It needs professional management, coordinated marketing, customer loyalty programmes, attractive retail offerings and a reason for people to visit.

Look at modern shopping destinations around the world. They increasingly combine shopping with restaurants, entertainment, family activities and experiences.

Physical retail needs to offer something that customers cannot easily replace with a smartphone.

The bigger picture

The struggles of Dhaka's shopping complexes are not isolated business failures. They are connected to inflation, weakening purchasing power, business uncertainty, rising operational costs and changing consumer behaviour.

However, we should not assume that every shopping complex is heading towards closure. Bashundhara City and Jamuna Future Park, for example, have different commercial advantages and need individual assessments rather than speculation.

Bangladesh does not necessarily need more shopping malls. It needs a healthier retail economy, stronger consumer purchasing power, sustainable businesses and better commercial management.

A shopping complex can survive without expensive architecture. It cannot survive without customers who have the willingness and ability to spend.

Perhaps the real question is not how many shopping malls Dhaka can build, but how many of them its economy can actually sustain.