Otavalo or more commonly known as the Otavalo market (going everyday from 7 am- 6pm) is THE place to buy souvenirs such as jewellery, bags, jumpers….just about everything! Locals from Otavalo are known nation wide for producing textiles and other craft- although Saturday is THE day to go as the market is very busy.
The craft market is geared towards tourist (also known as Plaza de Ponchos). But if wanting to buy anything, make sure that you are ready to haggle down the price. But with more time you can go to the neighbouring towns to get to the source of the craft products.
You can also go to the fruit and vegetable market which is found not too far away.
Octavalo is a 2 hour bus north from Quito, so easily done on a day trip, but I decided to stay the night – giving more time to relax and enjoy the place. You can go further afield as well to the Penuche waterfall (2 miles from town), Parque Condor (4km away) Ibarra (30 min bus journey) or Lago San Pablo (20 minute bus journey).