* Exactly how hot is Brazil?

The stylish women with their trim figures walking down Oscar Freire street, popping into Melissa for a pair of shoes or trying on the latest crystal-decorated Havaianas, look so sophisticated that this part of São Paulo could be any upscale city center — give or take the balmy climate and the flourishing green trees.

Compared with the other so-called BRIC countries — Russia, with historic department stores rising from gray streets; India, with its chaotic New Delhi markets; or China with its sprawling, often empty, shopping malls — São Paulo seems like a hive of glamorous commerce.

Alongside the fashionable shoes and handbags, the companion of any smart woman lunching at the cool and inventive Maní restaurant seems to be not just the latest cellphone but also a shopping bag or two. And these have the labels of well-established homegrown brands, as well as the international names.

How real is this feeling that Brazil has a tide of fashion sweeping over its beach culture? And that this irrepressible enthusiasm for style in Rio de Janiero and São Paulo is only the beginning of a wave of luxury consumerism lapping at the rest of Latin America?

Compared with China, Brazil has had far less attention from the big brands, although their stores are present in São Paulo, lining the streets in the upscale Jardins area. And the clicking of high heels echoes through the Iguatemi mall as shoppers survey the plate-glass emporiums of globally famous brands.

In spite of daunting barriers to getting the hot new designer look, including steep import taxes that can easily double the American or European purchase price, the luxury market here has been buoyant since the days when Daslu, an unapologetically elitist store in São Paulo, first captivated high-end Brazilian customers. By the 1990s, the store was an oasis of indulgence and a mecca for international brands, but subsequently it was investigated for tax irregularities and although still in existance, it is a shadow of its extravagant past.

The specter of the privileged preening among poverty no longer seems to haunt a country with a fast-growing middle class, although the disparity between rich and poor is still evident.

Carla Schmitzberger, president worldwide, of Havaianas — those famous flip-flop sandals — explains that São Paulo has a concentration of the wealthiest people in Brazil, and that you can see society reflected in her company’s key product.

The rise of rubber sandals from utilitarian footwear to Hollywood glamour is expressed in the Havaianas still sold as low-cost footwear across Latin America — in Argentina, Bolivia or Colombia. Yet in the São Paulo store, as well as globally, the fancier versions are on offer at seven times the basic cost.

Havaianas are certainly a gold mine. The parent company, São Paulo Alpargatas, credits sales of the flip-flops for a bit more than half of its 2010 net revenues of 2.2 billion Brazilian reais, or $1.25 billion.

“There is a huge discrepancy in Brazil. Maybe because women in high social groups often don’t work, they don’t altogether connect value to money earned,” suggests Ms. Schmitzberger on the subject of the country’s sky-high high cost of luxury.

“I don’t know what motivates them to buy Louboutins at three times the price, when they are able to travel,” she says. “It is the weight these brands carry — and a lot of weight put in Brazil on appearances.”

Natalie Klein, who is behind the stylish multi brand NK stores in São Paulo and Rio de Janiero, says that back in 1997, when she started, it was a new idea in Brazil to offer what she calls “cool luxury,” meaning nonostentatious fashion. Her store started a process of instruction, teaching clients about the modern fashion culture and encouraging them to try new experiences. And Ms. Klein focused on “citizens of the world, who travel and want more sophisticated clothes.”

Like any retailer in Brazil, the NK store resonates with one key word: service.

“This is the most important asset of the company: the service we provide,” Ms. Klein says. “We became a consultancy. The relationship with the client is close, personal; we learn about them, we direct them and they have confidence in our curatorial work.”

The concept of service at a five-star level is the element most likely to challenge European and American brands with stores in Brazil.

“Service has become a crucial factor in Brazil,” says Carlos Jereissati Filho, president and chief executive of the Iguatemi group, which operates 13 shopping centers across Brazil with annual sales in 2010 of almost $4 billion.

“Big brands need to look around more. They tend to have one strategy fits all — but Brazil is very different from the Middle East and Asia,” says Mr. Jereissati. “Things are very expensive and that creates a difficult market. In order to sell, you need amazing service and that is what Brazil has to offer.”

The success of Iguatemi, which is celebrating 45 years since its first mall was founded in 1966, is proof that shopping is part of culture in Brazil — and vice versa. Mr. Jereissati, who is a son of the founder, believes that the shopping experience needs to be more than just purchasing goods. That creates a sophisticated environment compared with malls in China or India.

“I realize that more and more people want a mall to be a lifestyle, asking ‘Where is my bookstore? My cinema? My digital shop? My kid’s place?’ or ‘Where I can have my hair done?”’ says Mr. Jereissati, who adds to that roster beauty and health care, fine dining, sophisticated entertainment and art as extra components.

“In São Paulo we are looking to be a cultural center with art exhibitions. People are not only consumers — they want to learn,” says the executive, although the Iguatemi mall has front and central global luxury brands like Burberry, Chanel, Gucci, Louis Vuitton, Missoni, Tiffany and Diane Von Furstenberg, whose sales in Brazil are her brand’s highest.

Because Brazil is the only BRIC country to have significant designers of its own, Gloria Coelho, Carlos Miele, Osklen and H.Stern are among the homegrown brands on sale.

For Mr. Jereissati, who graduated from business school in the early 1990s, just as Brazil was opening up and retailers could start importing, his mission was to follow his father’s vision: “to create the best mall — not the largest.”

Now another Iguatemi luxury mall, named JK (for the late President Juscelino Kubitschek de Oliveira) will open in April 2012 with brands new to the Brazilian market, including Dolce & Gabbana, Goyard, Lanvin — and Top Shop. Mr. Jereissati says the new mall will represent the “beautiful contradictions” of modern luxury, “where fast meets slow, art meets commerce and high meets low.”

With the Brazilian economy showing 7.5 percent growth in 2010 and projections of good annual growth for the rest of the decade, Iguatemi is focusing on ways to differentiate itself from other malls, planning to focus on high-tech ways of speeding up the boring part of shopping. (Read: the payment.).

Growth in Brazil is a different story. Iguatemi opened a 33,800-square-meter, or 363,820-square-foot, mall in Brasília last year and Mr. Jereissati believes that the luxury market will spread to other cities, like Belo Horizonte, Campinas and Porto Alegre.

In a wired and interlinked world, how different is shopping in Brazil compared with the neighboring United States?
Emanuel Chirico is chairman and chief executive of Phillips-Van Heusen, in charge of Tommy Hilfiger, Calvin Klein and other heritage brands. He disputes the general view from Brazil that U.S. brands have spent more time looking east to China than south to countries on their doorstep.

“With the exception of Brazil, South America has been much easier to develop than China, particularly because of South American travel to the U.S. and the long histories of the brands,” says Mr. Chirico, adding that Calvin Klein has been in Brazil for a decade under its Warnaco licensing agreement.

Yet Calvin Klein’s global retail sales for 2010 do not suggest a surge in Latin America. Out of a $6.7 billion total, 53 percent of sales were in North America, 25 percent in Europe, 17 percent in Asia and just the remaining 5 percent in South America and elsewhere. The retail sales volume for Calvin Klein in the region was $300 million, mostly from Brazil and Mexico.

Tommy Hilfiger’s American cool has found a stronger response in Central and South America, which provided 10 percent of its $4.6 billion sales last year, an exact match with the percentage from Asia.

“In general, the Brazilian market has extremely high import duties and for that reason alone, it has been more difficult for international brands to build a material business there, relative to parts of Asia,” says Mr. Chirico. “But the Brazilian consumer is increasingly interested in global brands. We see this in our growth there, as well as in the United States, where Brazilian consumers are our No. 1 international shopper.”

Marc Puig, chairman and chief executive of the Spanish-based fragrance company Puig, focused early on the company’s Latino connections. Brands like those from Carolina Herrera, the Venezuelan-born, New York-based designer; Paco Rabanne; Antonio Banderas; and the Colombian singer Shakira all had a resonance in Latin America — even more than Puig’s haute fashion fragrances from Prada, Nina Ricci and Valentino.

“At Puig, we placed a high priority in South America long before many other companies for obvious reasons: There is a cultural affinity with the territory since we are a Spanish company,” says the executive. “Before the area became part of the emerging world, the territories were not a major focus of our competitors and that gave us an advantage. Today that is no longer the case. I can’t imagine a company whose board has not asked its management team what are the plans for the region, specifically for Brazil, since it became one of the BRICs.”

The early start, allowing the brands to capitalize on recent growth, is evident in the sales ratios. Puig’s annual sales in Latin America are 19.9 percent, in contrast to just 7 percent in North America and the company increased its total net profit year on year by 57 percent, to €130 million, or $180 million, in 2010 from €83 million in 2009.

Mr. Puig describes Brazil as more like a continent, representing 50 percent of the economy of South America and operating under its own rules, as in the fragrance market, where 90 percent of sales are door-to-door.

Behind this Latin American market leader come areas that, Mr. Puig says, all have different levels of market awareness: Mexico, Argentina, Chile, Colombia, Venezuela and Peru.

Global brands have to face up to the Latin American demographic fact that a third of the population is younger than 30. But it seems that big names do register with the millennial generation, as stores reach out to young clients.

Cidade Jardim, a São Paulo mall of 45,000 square meters, landscaped with trees and greenery, opened in May 2008 with a focus on Brazilian brands. But it has developed into a 180-shop mall with luxury brands from Hermès and Petrossian caviar house. By spring 2012, it will add Cartier, Dior, Fendi, Gucci, Louis Vuitton, Prada and Tod’s.

Brands often build sales in emerging markets with accessories, but Maria Luisa Pucci, director of retail operations at Cidade Jardim, says that although accessories are the driving factor, customers are also focused on ready-to-wear. And Ms. Pucci says there is a high ratio of visits converted to sales through the week and on weekends, when traffic doubles.

Like all high-end shopping spots throughout Brazil, this mall offers deferred payments over three or more installments. But it also aims to be more than just a shopping center, with lifestyle experiences including movies, bookstores, a gym – and an appeal to children with a Reebok sports club. Men are lured by a store selling those must-have toys: yachts, helicopters and jets.

Although Cidade Jardim has visitors from across Brazil, luxury malls do not yet extend beyond the big three cities: São Paulo, Rio and Brasília.

That leaves the field open for farfetch.com, a Web site that is an amalgamator, handling online sales for 80 stores worldwide and 25 in Brazil, including the NK stores.

For José Neves, the company’s chief executive officer, and a Portuguese native who formed his fashion experience in London, Brazil’s booming mining towns are obvious targets for his boutique-based e-tailing.
“I founded farfetch three years ago and we have seen an incredible response from the public, as well as from independent boutiques and brands,” says Mr. Neves, explaining that the Brazil presence (farfetch.com.br) was introduced a year ago and offers a mix of 2,000 global labels and 50 high-end Brazilian designers. The executive talks about “an impeccable level of service to the Brazilian customer, with local payment systems and split payments; assisted, fast customs clearance with all taxes prepaid by us; and easy returns, not to mention a local V.I.P. and native language customer-service team.”

But, above all, Mr. Neves finds in Brazil a distinctive market that he calls “sophisticated and impulsive.” He notes a fast-growing middle class starting to catch up with the affluent part of the population and a customer who “spends a lot.” Add to that a very low rate of savings — compared with China, for example — and Brazil as an individual entity far outweighs any putative growth in the rest of Latin America.

Susanne Tide-Frater, the brand and strategy director of farfetch, expresses what is perhaps the crucial factor to understanding the South American attitude to luxury.

As a former creative director at Harrods and Selfridges department stores in London, she sees the Latin American customers as different in spirit from the world-weary attitude that hovers over shoppers in Western countries.

“They are happy to pay 80 percent more, providing they receive up-to-date goods in real time,” Ms. Tide-Frater says. “Brazil is fantastic because it has a buzzy economy and a real fashion ‘will.”’