Surveillance footage from the incident that happened yesterday shows a metal panel at the top of the escalator giving way, causing the woman and her toddler to stumble.
The woman, identified by local media as Xiang Liujuan, 30, was able to push her child to safety as she fell in.
The incident in Jingzhou, in central China's Hubei province, has sparked widespread anger, Wuhan Evening News reported.
It took some four hours for rescuers to retrieve her body from the machine, state broadcaster CCTV said.
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There was no immediate comment from the shopping centre, but local authorities are investigating the incident.
Unconfirmed reports said that maintenance works had been carried out on the escalator recently, and workmen had replaced the metal panel but forgotten to secure it with screws, Wuhan Evening News said.
The incident has sparked fury on Chinese social media, with many demanding answers from officials of the mall. Microblog posts on the subject had attracted more than 20 million views.
China has seen several escalator-related accidents in recent years, including an escalator in Shanghai that suddenly reversed direction in 2014, injuring 13 people, and a Beijing escalator that malfunctioned in 2011, killing a teenage boy.