The indigenous people of Otavalo have established quite the reputation with their fine textiles. In fact we have encountered their work in markets throughout Colombia, Ecuador, Peru, and Bolivia. On a visit to the post office we even saw several large shrinkwrapped packages stuffed with 'Domican Republic' embroidered bags and wall hangings all bound for the homes of unsuspecting all-inclusive-resorters.
Each Saturday the majority of the town becomes transformed into one of the largest (if not the largest) open air markets in South America. Here anything from crafts to livestock and produce can be found. Otavalo is only a few hours north of Quito, so as a result becomes engulfed with Quitonians and gringos on Saturdays. While certainly not the most authentic market we have encountered, the colourfulness and bustle where certainly impressive.
Safe travel tip number 3:
When visiting busy markets, try to blend in and avoid drawing unnecessary attention to yourself.