Fast fashion brands continue to face the high cost of doing business in Brazil.

Shein may have caused disruption in the national clothing retail market, forcing local and global brands to rethink their operations in order to compete.

But the "Brazil Cost" continues to weigh heavily on most companies in the country, including Chinese fast fashion, which, even though cheaper than its counterparts, has one of its most expensive markets in Brazil.

This is shown by the Zara Index , developed by BTG Pactual , which compares a basket of 12 products from the Spanish brand in 54 countries to assess differences in operating costs and prices in the fashion segment.

The index indicates that Zara products are now 3% more expensive in Brazil than in the United States. This result represents a reversal compared to last year, when they were 6% cheaper than in the American market.

Adjusted for purchasing power parity (PPP), Zara's prices are 123% higher than in the United States, keeping Brazil among the most expensive markets for the brand's consumers.

According to analysts Luiz Guanais, Yan Cesquim, and Pedro Lima, the appreciation of the real against the dollar was the "tipping point" that allowed costs to prevail over the need for more competitive prices. By 2025, the real had appreciated by approximately 15%.

"Even though Zara adjusted its prices in response to an increasingly competitive market, it still managed to pass on some of the cost pressures to the consumer," the report says.

Despite frequently appearing among the most expensive countries in the Zara Index since 2014, Brazil is not among the top positions in this edition. Among the 17 most expensive countries, it ranked 16th, with New Zealand in first place.

In the PPP-adjusted ranking, Brazil occupies the 13th position among 49 markets, led by Thailand .

The study also shows that Shein faces difficulties operating in Brazil. The Chinese brand's products are 7% cheaper in Brazil than in the United States, considering a basket of eight items across 15 countries. Compared to local brands, Shein is 6% cheaper than Riachuelo , 10% cheaper than Renner , and 13% cheaper than C&A .

However, adjusted for PPP, Shein's prices are double those in the United States , making Brazil one of the most expensive markets for the company, even though it has improved compared to the previous result, when it was 189% more expensive.