You are walking around in a shopping mall or some sort of store, even though you might buy something, you don't have anything specific in mind and you are walking around the store, to have a look.
If a salesman or a saleswoman asks you if they can help you with something, how do you explain to her the whole situation — that you don't have an idea what you want, you will buy something if you like it, but you don't know what it is, and you have to walk through the entire store to see if you want anything or not?
You can of course say "no", but it will be kind of rude.
Best Answer
The phrase "I'm just looking" would not be considered rude, and I think it's a rather common way of saying it in shopping malls and department stores.
There's also the term window shopping, which means "looking at shop windows without intending to purchase anything." That term is not merely restricted to passersby of store windows, however; people will sometimes use that expression when they checking out the merchandise in the aisles of the store.
That said, I'd be more inclined to tell a sales clerk "I'm just looking," before I'd say "I'm only window shopping."