SÃO PAULO, Brazil — Late last year, a report in the major Brazilian newspaper Folha de São Paulo provoked a strong reaction from the local fashion industry. Folha had obtained a detailed account of a meeting during which Mauro Friedrich, director of logistics at Zara's Brazil division, pointed out that Brazil was by far the most challenging market of all the 86 countries in which Zara operates. In what was described as an "outburst," Friedrich listed bureaucracy, logistics, taxation and access to skilled labour as the primary issues. Zara first arrived in Brazil 14 years ago and now operates a total of 41 stores in the country, far behind their initial plan of 50 stores in 3 years.

Despite the challenges, long-absent players like Topshop, Gap and Forever 21 have now set their sights on the market. Since 2012, when the company opened its first store at the JK Iguatemi mall in São Paulo, Topshop has opened three additional stores in the country (two in São Paulo and one in Ribeirão Preto, a smaller town in São Paulo State) and plans to open two to three new stores each year for the foreseeable future. Forever 21 will open its first store at Morumbi Shopping in São Paulo this month and plans to expand to open six total stores in Brazil in 2014, while Gap, which first arrived in Brazil in September 2013, promises three more stores for the first semester of 2014. According to market sources, H&M is also thought to be eyeing a Brazil launch in 2014.

But these new entrants face stiff competition from a host of entrenched players, including C&A, the first international apparel chain to arrive in Brazil. The Dutch retailer, founded in 1841, arrived in the country back in 1976 — long before the most recent wave of globalisation — and has since become the largest fashion retailer in the country, with over 260 stores and colourful, energetic brand communications. Its product offering is also highly tailored to the local market.

"We know Brazilian women very deeply. Their preferences, tastes, necessities and shopping habits are in our DNA. It's an expertise we gained with time and lots of research," said Paulo Correa, vice president of sales at C&A Brazil. "Our project Poderosas do Brasil (Powerful Women of Brazil) has the goal to identify different aspirations from women in different regions of Brazil and create pieces with the unique regionalism that is characteristic [of] different Brazilian states," he added, emphasising the connection that C&A has developed with local consumers.

The market is also populated with indigenous low-cost apparel giants like Lojas Riachuelo, Lojas Renner and Lojas Marisa. "We have 212 stores in Brazil," Flavio Rocha, president of Riachuelo, the largest apparel retailer in Brazil, told BoF. "Last year, we opened 43 new stores, a record for us and we will double our number of stores in four years," he added. Riachuelo produces most of its many collections in Brazil and is involved in every step of the supply chain, from design to logistics, production and distribution.

"We are prepared to fight a good fight with international competitors. Being local plays in our favour. The global players will have to face several challenges,” Rocha said. “First, there is the hemisphere difference. São Paulo is usually the first store in the Southern Hemisphere for those brands and this generates a serious problem with seasonality. They have the need to create a different collection for very few stores to sell with no scale.”

In Brazil, Gap sells collections that are six months behind those it sells in the US. "As the seasons are inverted, we work on the reversed seasonality mode. We work with a six-month delay in comparison to the Northern Hemisphere," said Carolina Correa, marketing manager of Gap’s Brazil operation.

But, interestingly, Topshop has taken a different approach, selling the same collection, at the same time, in Brazil, as it does in Europe and the US. "We have, in Brazil, the same collection you find in London or New York. So this alone pushes us away from local competitors,” said Daniela Valadão, brand manager for Topshop in Brazil.

“There is also a special collection for the Southern Hemisphere, which includes Brazil, South Africa, Chile and Australia. It is made in London and has the same colours, prints, shapes and styles of the current collection, but adapted to the opposite season," she explained. "Sometimes it is an issue to have winter products when everyone else is selling summer, but it’s an ongoing learning issue. Our operation in Australia and South Africa is also very young, so we are learning as we go, but I think we are on the right track. Real time is very important. I think it doesn’t make sense anymore to wait for six months to launch the collections in Brazil.”

Recently, Riachuelo made a splash with the launch of its first flagship store on Rua Oscar Freire, a tree-lined street in the Jardins district of São Paulo that used to house luxury brands like Louis Vuitton, Cartier and Dior before they moved their operations into the city's popular malls. "This store, at first, was meant to be mostly a marketing effort, but it has become a strong commercial success, being the highest selling spot of all the chain in December 2013," revealed Rocha.

But despite strong local competition, international apparel players have still been well received. "The reaction of the local consumer to Topshop is very positive, especially and surprisingly with Topman,” said Valadão. “At first, I was frightened that Brazilian men wouldn't wear the brand because it wasn’t something I really saw happening on the streets. But the truth is no one was offering that style in Brazil. We found a niche that was still unexplored in the local market. Our clients feel finally someone is offering this edgier styles they can find when they travel,” she continued.

Whether international fast-fashion companies ultimately succeed in taking significant market share from Brazil’s entrenched apparel players remains to be seen. But, for the moment, the market seems to have room for both. “I see the arrival of these companies on a very optimistic way,” said Rocha. “It is a sign of our market’s maturation.”