The South Americans strolled to a comfortable 2-0 win in a one-sided warm-up match in front of a 25,000 crowd at Middlesbrough's Riverside Stadium.
First-half goals from Sandro and Neymar, the game's outstanding performer, underlined the gulf between the sides less than a week before the start of the Men's Olympic Football Tournament.
Pearce's side launch their campaign against Senegal at Manchester United's Old Trafford on 26 July. They were given a lesson by the visitors, and the coach admits the hosts are playing catch-up in their bid to produce a home success at the London Games.
"We knew how good Brazil would be," conceded Pearce, the former England international. "They're an outstanding side. We now understand the magnitude of the task ahead, because whoever beats Brazil will earn the gold medal. We know we need to come to the boil before next Thursday and beyond.
"Brazil have probably been preparing for the Olympics for the last two or three years. We've come through two games now and we're getting used to playing with each other. We've got five or six training sessions before the Senegal game. It's a steep learning curve."
Brazil coach Mano Menezes did his best to play down their chances of claiming gold in the Olympic final at Wembley Stadium on 11 August, insisting: "It's too early to talk about medal candidates at this stage. Some teams are more prepared than others.
"It was a good work-out for us, but we're not worried about sending out messages to our rivals before the tournament. This was more about gelling together as a team."