How SM Group is rethinking malls around a new generation
For decades, the formula for a mall was fairly straightforward: Put as many things as possible under one roof and make shopping convenient.
But today’s Filipino shopper is asking for something more.
They want a good meal, a place to meet friends, an activity to try and, perhaps, a corner photogenic enough for their next Instagram post. Younger customers, in particular, expect brands to understand their interests and speak to them more personally.
For SM Supermalls, enticing these customers to come back means learning to change with them—or, as its executives now put it, changing for them.
“We used to say previously we evolved with our customers,” SM Supermalls executive vice president for marketing Joaquin San Agustin said.
“But I’d like to look at it in a certain way from the marketing point of view: we’ve evolved for our customers.”
That distinction is shaping how the country’s largest mall operator thinks about everything from mall design and restaurants to events and marketing.
It is also at the heart of My SM, a five-year platform designed to transform its malls around the changing needs, lifestyles and aspirations of Filipino communities.
From convenience to experience
San Agustin said the difference between the shoppers of yesterday and today is perhaps easiest to see by looking at the malls themselves.
Years ago, malls were designed largely around practicality: Easy access and the convenience of finding almost everything in one place.
“Today they look for experience,” he said. “They look for things that are Instagrammable.”
That has pushed SM toward brighter colors, bigger installations and more distinctive storefronts. Beyond how malls look, however, the company is also rethinking how it identifies the people walking through them.
Instead of simply grouping shoppers into broad categories such as families or youth, SM has begun looking at them according to their interests and passions—what San Agustin calls “tribes.”
A major reason is Generation Z, which he described as the biggest component of SM’s customer base.
“They want to see the sincerity in what we do, the authenticity in what we do,” San Agustin said.
For SM, that means personalization cannot simply come from executives trying to guess what young people like.
The company has formed a “Gen Z Council” composed of its younger employees, who help identify trends and provide management with a view of what their generation actually wants.
SM Supermalls president Steven Tan, now in his 50s, readily acknowledges that he is not the target customer.
“I always tell our people, put your ears on the ground,” Tan said. “Do not be detached from your consumer.”
The trick, he said, is to listen rather than assume that experience always knows best.
“Do not be like a know-it-all because you learn so much from the younger people,” he added.
The Gen Z Council discusses ideas separately before presenting them to senior executives. Management then brings its own experience to determine which ideas can work in practice.
For San Agustin, that process gives SM a direct line into “the pulse of the market today.”
A mall you can eat your way through
The evolution of SM’s customers is also changing what occupies the mall.
When Tan joined the company in 2004, restaurants accounted for less than 5 percent of SM’s tenant mix. Today, food establishments make up about 30 percent.
It was not simply a matter of replacing one tenant with another.
SM had observed how the rise of e-commerce affected malls in China and anticipated that the same trend would eventually reach the Philippines, according to Tan.
Increasing the food component required malls to be physically prepared with exhaust systems, water, sewage and drainage.
“You have to constantly inject freshness to your centers so that you keep the interest in coming back,” Tan said.
Sometimes, freshness can be as simple—and as timely—as matcha.
SM has staged matcha fairs in its malls as the drink surged in popularity, one example of how the company can quickly turn a consumer craze into an on-ground experience.
For Tan, responding to customers this way is not merely a marketing exercise.
“It is our responsibility to our consumer that we inject freshness,” he said.
More reasons to visit
Increasingly, that freshness has little to do with shopping at all.
SM has been expanding its sports, leisure and entertainment offerings as consumers look for experiences beyond retail.
In the first half of the year, it added 41 pickleball courts, bringing its network to 102 courts across 32 properties nationwide. It also cohosted the Galaxy Manila Marathon in June, which drew more than 25,000 runners.
That customer-focused transformation is unfolding while the mall operator continues to grow.
SM Supermalls posted record revenues of P41.8 billion in the first half of 2026, up 8 percent from P38.6 billion a year earlier.
For Tan, understanding the market is central to sustaining that momentum.
SM plans to keep introducing new brands, cinema and entertainment attractions and leisure offerings. It is also preparing to open its 91st Philippine mall, SM Nuvali, which the company says will feature an upscale concept as it expands in south Luzon and Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon).
But behind the new malls, restaurants, pickleball courts and Instagrammable spaces is a relatively simple idea.
What worked for the Filipino shopper 20 years ago may no longer be enough today—and what excites Gen Z now may be old news tomorrow.
For SM, staying relevant means resisting the comfort of thinking it already knows what people want.
Perhaps that is why Tan’s advice to his team is remarkably simple for a company trying to shape the mall of the future: “Put your ears on the ground.”
It’s because the next version of SM may not be decided in the boardroom at all. It may already be taking shape in the conversations, cravings and passions of the millions of people walking through its doors.
