Kylie Jenner -- I'll Make A Better Mermaid Than Kim (PHOTO)

Kylie Jenner is outdoing big sister Kim again ... this time with her Halloween costume.

Kylie stopped by Trashy Lingerie in LA this week -- the same place Caitlyn Jenner got her Vanity Fair corset -- to get the ball rolling on a sexy mermaid costume.

Sound familiar?

Kim dressed up as a mermaid back in 2012 for a NYC Halloween party. We're told Kylie's going to show way more skin. And Kylie's kostume will be festooned with beads and rhinestones.

Kim spent around $2,500 for her mermaid costume ... Kylie's going bigger and cheaper -- under $2k.

She also wants extra padding ... some things she just can't one up.