[Viewpoint] What Is Market 5.0?

Suh Yonggu, Dean of Sookmyung Women's University Graduate School of Business Administration
The Pandemic Accelerates Market Evolution:
From Market 3.0 and 4.0 to the Human-Centered Market 5.0
Bridging the Big 3 Gaps:
Digital, Income, and Generational Inequalities in the Post-Pandemic Era
Toward Sustainable Balance:
How Companies Must Lead with Humanism and Digital Innovation

Seoyonggu, Dean of the Graduate School of Business at Sookmyung Women's University.

The entire world is suffering from the measles of the COVID-19 pandemic. Economic, social, and cultural changes are occurring intensely. As a result, the so-called 'pandemic effect,' where the future 5 to 10 years ahead is realized within just one year, is becoming a reality. Philip Kotler, a global marketing scholar, argues that the market will evolve into Market 5.0 in the future. Market 5.0 refers to a market born from the combination of Market 3.0, which values humanity, and Market 4.0, which emphasizes digital transformation, representing a new market that prioritizes humanism. After the pandemic, as Capitalism 4.0 and the era of ESG (Environment, Social, Governance) fully take hold, the market will shift to 5.0. Kotler stated, "Now, the purpose of companies and marketing is to make people's lives better and to dedicate themselves to the public good."

After the pandemic, the so-called Big 3 gaps?digital utilization gap, income gap, and generational gap?are widening further. In the Market 5.0 era, companies must reduce these three gaps through humanism and lead our society toward a sustainable new balance.

First, the digital gap must be reduced. Many future scenarios imagine a dystopian world where AI technology advances cause human jobs to disappear and freedom to be restricted. However, looking at the examples of the 2nd and 3rd industrial revolutions, although existing industrial jobs decreased, the increase in new jobs actually raised the total number of jobs. Globally, by 2030, when internet penetration reaches about 90%, jobs in the tertiary industry will continue to increase, and new jobs are continuously being created in the 4th industrial sector. The 4th industrial revolution will enable a high-touch, high-tech society through new attractions, jobs, and one-on-one personalized services.

Second, income inequality must be reduced. Since 2008, income polarization has rapidly progressed worldwide. In Korea as well, the proportion of the middle class, defined as those with median income between 50% and 150%, is collapsing to around 50%. Income polarization brings about job polarization (executives earning 10 times the salary of new employees and irregular workers), ideological polarization (globalization versus closed anti-trade stances), lifestyle polarization (minimalists versus consumerists), and market polarization (low-price markets versus premium high-price markets). Market 5.0 companies must strive to reduce income disparities.

Third, marketing that reduces the generational gap is necessary. For the first time in human history, consumers spanning five generations with very different values and lifestyles coexist in the market. For Baby Boomers born before 1964, product-centered (Market 1.0) marketing emphasizing product quality is needed. For Generation X, mainly born in the 1970s, customer-centered (Market 2.0) marketing should be developed. For Millennials born after 1980, marketing that emphasizes sustainable and eco-friendly products from socially responsible companies (Market 3.0) is necessary. For Generation Z consumers born after 1995, digital marketing centered on the digital consumer journey (Market 4.0) must be implemented.

In conclusion, the Market 5.0 era has arrived. Companies must take the lead in solving societal problems by integrating and advancing human-centered marketing and digital technology-centered marketing.

This content was produced with the assistance of AI translation services.