The 2018 World Cup finalists, aiming to make it two semi-final appearances in a row, have a mountain to climb with pre-tournament favourites Brazil confirming their status with a 4-1 round of 16 demolition of South Korea.
"Brazil were favourites before the tournament. They have two teams that can play at this level," Lovren said on Wednesday. "Any of their substitutes can come on and make an instant impact. We respect everybody and that is how we work."
Croatia, whose coach Zlatko Dalic described Brazil as "terrifying", have had a tougher road to the last eight, needing penalties to oust Japan after a 1-1 draw over 120 minutes, but fitness is no issue.
"We showed that we are in great physical shape," Kovacic said. "We worked a lot during these World Cup games. The Japanese team were very disciplined and it was difficult to break them down."
"But we showed a lot of physical fitness and I believe we can play even better."
What will be key for Croatia is to manage to keep possession against the Brazilians, no easy feat with Brazil coach Tite ready to field his first-choice team for the first time in this tournament.
With talisman Neymar (30) and key defender Danilo (31) returning against South Korea after missing two games to injuries and due to ankle problems, coach Tite could also have Alex Sandro (31) back for the game on Friday.
"How we can stop them?," Lovren said. "It is simple. Our goal is to try and stop the whole team. It will be a very difficult fight."
As for Brazil's exuberant celebrations when they score, which some have said are disrespectful to their opponents, Lovren said he had no problem with them.
"Honestly, everybody can celebrate however they want. I have no issues with that," he said. "I don't think it is disrespectful."
"There are boundaries for everything, but Brazilians were born singing and dancing and I have no problem with that."
