Shopping at Zara is more expensive in Brazil than in any other country, reveals the fourth edition of an annual study by Brazilian investment bank BTG Pactual. Titled “Zara Index”, the research takes the price of 12 Zara items across 44 countries, then converts local currencies to US dollars and compares them to the prices offered in the United States. Brazilians pay on average 18 percent more than Americans for the same clothing items at Zara.
Consumers looking to buy Zara items for the lowest possible prices should head to the retailer’s home country, Spain, or its neighbor Portugal, where prices are 36 percent lower than in the United States.
But what makes Brazil so expensive? To start, the country is far away from where most of Zara’s clothes are made. Only 1.2 percent of Zara’s factories are located in Brazil and Argentina. Most of the brand’s production (57 percent) takes place in Spain, Portugal, Morocco and Turkey. According to BTG, more than 40 percent of Zara’s clothing sold in Brazil was produced locally ten years ago, but the brand’s parent company, Inditex, decided to focus on imports after having problems with Brazilian suppliers.
Secondly, one can blame Brazil’s complex tax structure, with heavy import duties and significant differences between the country’s 26 states. Last but not least, logistics: Brazil is a country of continental proportions which is heavily dependent on roads -- railways are practically non-existent. Last year, the country invested only 1,4 percent of its GDP in infrastructure.