Despite the challenges, Business of Fashion reports that popular North American fashion companies like Topshop, Gap and Forever 21 have set their sights on the Brazilian fashion market. Since 2012, Topshop has opened three additional stores in the country 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.

These new players will face competition from firms already rooted in the Brazilian market, including C&A, the first international apparel chain to arrive in Brazil. since 1976, its 260 stores have become the largest fashion retailer in the country.

“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.

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.”

But despite strong local competition, international apparel players have still been well received. 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,”said Daniela Valadão, brand manager for Topshop in Brazil.