(FORTUNE Magazine) – JOE BACZKO is a toy salesman, not a demographer. But listen to sound bites from his spiel about why his company, Toys ''R'' Us, is going to knock them dead in Asia, and you get a good picture of the megatrends that consumer marketers in the region will be focusing on during the coming decade. ''Year in and year out, people are becoming better off . . . more working women . . . later marriages . . . fewer children per family, but more families . . . grandparents living longer . . . more leisure time . . . higher expectations, and a propensity to spend on a better life.'' There's more. ''We benefit from all these trends and even from some of the negatives,'' says Baczko, until recently president of the international division of Toys ''R'' Us. Such as? ''Higher divorce rates. Parents who've separated tend to give more toys to their kids.'' To hear Baczko, Toys ''R'' Us need only wait for the demographic tides to bring consumers flooding through its doors. For most companies it won't be such a cinch. The economic and social changes now sweeping through Asia, familiar as they may seem to Western companies, are mixing with the region's traditional values and lifestyles to create wholly new and complex groups of consumers. The changes are occurring so rapidly -- and sometimes so abruptly -- that few market researchers pretend to understand their ultimate impact. Says Pacific Rim Consulting Group co-founder Michael Morris, who has run Asia/ Pacific operations for Heineken, PepsiCo, and Quaker Oats: ''When you shift from a rural to an urban lifestyle, from spending 17 hours a day stuck -- literally stuck -- in a rice paddy, to working at a factory, suddenly things happen to you. Your values and motivations change.'' Western marketers have a powerful reason to storm the region: Asians have become serious consumers. A decade of rising prosperity has spread broadly enough to form identifiable markets of millions. McKinsey & Co. estimates that in 1988 some 72 million people in the region -- not including Japan -- lived in households that enjoyed incomes of $10,000 or more. (In 1988 the typical American household's income was $27,225.) By 2000, McKinsey says, the number could surge to 110 million. Other forecasters project that by then South Korea and Taiwan, countries of 42 million and 20 million people whose growing affluence is outstripping most other Asian countries', will boast per capita gross domestic products of $11,000 and $13,000, respectively. That would put them a notch or two above where Spain and Ireland stand today. Running with this tide of prosperity are forceful, overlapping currents: growing national populations, shifts from rural to urban living, increasing household formation rates, and a slowly changing role for women. Some of these trends -- population growth, for instance -- could become threatening undertows. For purveyors of consumer goods, the surest bet is that the impact of the trends, whether positive or negative, will be large and lasting. -- PEOPLE. Some 1.7 billion people live on the Asian side of the Pacific Rim. Though population growth is slowing in most of the region -- 1.1-billion- strong China included -- it will be home to roughly 400 million additional people in 20 years, according to United Nations projections. Now extraordinarily young, the region's population will steadily age, so that in just ten years about 30% of all people will be in their 30s and 40s, the prime earning and spending years; currently, the figure is approximately 25%. Those who live beyond age 65 will also increase -- in number and as a proportion of the total population. -- CITIES. Slowly but relentlessly, Asia's people are moving off the farm. In just 30 years, for instance, South Korea's population has flipflopped to 73% urban from 72% rural. By 2000, more than 80% of all South Koreans will likely live in cities. Though less developed countries such as Thailand, Indonesia, and the Philippines are still predominantly rural, their urban areas are growing rapidly too. Bangkok, Jakarta, and Manila -- already strained by shortages of housing, transportation, energy, and capacity to protect the environment -- will grow by roughly 50% over the next ten years. That would give them populations of 12 million, 17 million, and 12 million, respectively. A U.N. report warns that urban congestion has the potential to produce ''tinderbox situations.'' -- FAMILIES. They are shrinking in two ways. Women are bearing fewer children than their mothers did a generation ago, a tendency that is strengthening as the level of education rises. Meanwhile, as incomes go up, extended families who once lived together under the same roof (and often in the same room) are establishing separate households. In South Korea these coalescing trends have reduced the average household from 5.13 members in 1975 to 3.79 today, a decline echoed in Taiwan, Hong Kong, and Singapore. At the same time, the sheer number of households promises to rise sharply as all those 20- and 30- year-olds establish families. Their homes will be more spacious. In South Korea the proof is to be found in neatly trimmed statistics: The average household's floor space increased nearly 10% between 1975 and 1985, to 487.6 square feet from 445.6 square feet. -- WOMEN. Almost everywhere in Asia, they are staying in school longer, marrying later, having fewer children, and entering the work force in greater numbers. Many take a job outside the home because their families need extra income, others because they want to put their educated minds to work. Nonetheless, says a (male) advertising executive in Malaysia: ''The Asian woman is still treated as a second-class citizen.'' BINDING TOGETHER these megatrends and impelling them forward is the unceasing, accelerating global exchange of information. ''Consumers in Taiwan and Hong Kong know what's happening in Japan and the States. They know what's happening in Singapore,'' says Christopher Nelson, who manages the Asian operations of Dairy Farm International, a Hong Kong supermarket chain that is aggressively expanding in the region. ''Everywhere they turn they're enveloped by information: newspapers, TV, music, travel.'' The movie Dick Tracy, with accompanying T-shirts and toys, opened in Hong Kong less than a month after it opened in the U.S. Not so long ago, the lag might have been 24 months. Expectations bred by this rush of information are having one especially intriguing effect: The income thresholds that strategic planners use to project when an economy will be ripe for shampoo, say, or for supermarkets, seem to be falling. Dairy Farm, for instance, moved into Taipei in 1987, when the city's per capita GDP was roughly $3,600. The company is now shopping for sites in Bangkok -- even though per capita GDP for all of Thailand is only $1,200 and for Bangkok itself, $3,000. What do these megatrends mean for marketers? More, of everything. More housing, and thus more telephones, appliances, TV sets, furniture, light bulbs, and toilets and toilet cleaners. More working women, and therefore more dresses, shoes, and cosmetic potions to make them spiffy on the job. Below the surface, where demographics mix with psychographics, the impact will also be substantial. Take the growing numbers of elderly. Procter & Gamble recently began marketing adult diapers to Taiwan's fast-growing elderly population. But these consumers will buy far more than that. Says market researcher Alastair Gordon of Survey Research Taiwan: ''They won't be the same kind of people as the elderly Taiwan Chinese of the past generation. They've lived in a rapidly developing society these past few decades and have been exposed to different influences than their predecessors.'' Increasingly they will travel, open up checking and credit card accounts, attend school -- things still foreign to most of today's older Asians. EVEN AS the gray market expands, many more corporate strategies will focus on the lopsided number of young Asians. When Nestle entered the Malaysian breakfast cereal market four years ago, the under-14 segment represented a staggering 38% of the country's population. Leaving the adults to their rice porridge and pork rib soup, Nestle served up Koko Krunch to the younger set and quickly overtook Coco Pops, Kellogg's offering in the still-tiny presweetened category. In July, Nestle introduced a less sugary cereal for adolescents and young adults. Within these young, smaller families buying up the Koko Krunch reside what may be the most important changes afoot. Young couples who live apart from their parents may no longer feel the need to defer to them, or to older relatives. Just how differently this new generation will behave is unknown, since the phenomenon is hard for sociologists to study. But anecdotal evidence suggests a few ways. Many young Chinese families are taking vacations by themselves during periods such as the lunar New Year holiday instead of spending the time with the clan. They are also showering their fewer children with more -- and more expensive -- toys and clothes. Working women are an important factor behind the emergence of supermarkets, department stores, and 24-hour convenience marts. With more disposable income but less time to shop, they are willing to pay for convenience. Dairy Farm, the Hong Kong chain, has opened 25 supermarkets in Taiwan since entering that country three years ago. Jusco, a Japanese supermarket company, has seven stores in Thailand, Malaysia, and Hong Kong. Contributing to the growth: recognition by many women that the new supermarkets and convenience stores are generally more sanitary than traditional ''wet markets'' -- those colorful outdoor stalls laden with fruits, vegetables, and freshly butchered meats. That doesn't mean the wet markets will disappear -- they are a way of life for millions of Asian women. But many Hong Kong Chinese, for example, shop the brightly lit aisles of supermarkets for dry goods and some fruits and vegetables, while still buying their meats ''quivering fresh'' at the wet market. Advertising plays a critical role in the development of mass markets. But restrictions in many countries on what advertisers can say, how they can say it, and how often, are encouraging companies to experiment with other means of reaching customers. Until recently Indonesian TV ads were limited by law to a subscription channel that has just 120,000 viewers (in a country of 180 million people). That and other incentives drove Auto 2000, the country's main Toyota dealer, to develop a sophisticated direct-mail scheme aimed at existing customers, who through repeat business or referrals account for over half the dealer's sales. The first mailing goes out this fall and could be a catalyst for direct marketing in Indonesia. FOR DIFFERENT reasons, some Asian politicians would be happy to see their constituents spend less -- particularly on Italian leather goods, diamond- studded Swiss watches, and other expensive foreign products. Earlier this year the South Korean government, fearful of frittering away its hard-won trade surplus, apparently let retailers know that the nation's spending binge on such luxuries was unhealthy. Some retailers in Seoul promptly emptied their shelves of offending products but soon restocked them when the government pressure subsided. More problematic over the long term: Islamic tenets that preach against lavish living -- and that influence the behavior of predominantly Muslim states like Malaysia and Indonesia, as well as Muslim minorities in the Philippines, Thailand, and Singapore. Malaysia recently passed regulations warning pointedly that ''advertisements must not project and promote an excessively aspirational lifestyle.'' These problems pale beside the region's potential. Across the Pacific Rim, companies are busily adapting to the big-picture changes now under way. The most confident companies are even thinking about how to organize themselves to be able to satisfy tomorrow's consumer, whose motivations and desires they can only imagine. ''Our success,'' says PepsiCo's Richard Blossom, echoing other managers who are trying to look beyond the immediate horizon, ''will depend on our ability to exploit change. And to create change.'' Ultimately, this means being able to manage change itself: having the ''flexibility of mind,'' as one Hong Kong executive puts it, to view constant, rapid change as an opportunity. By that standard, no other place on earth should have as many opportunities for consumer product companies as Asia in the 1990s.