The local Eritrea market is filled with stalls selling all kinds of traditional handicrafts made from olivewood, leather, straw, and clay. Goods are of high quality and well made. You will see home-spun cotton garments, gold jewelry, ivory items, and products made out of zebra and leopard skin. Souvenir markets in the capital and elsewhere are known for their pearl, silver, and gold jewelry, accessories, and beautiful textiles. You should, however, beware of potential parasites when buying cloth and animal skins. Inspect the products carefully and make sure that they have been treated, washed and dried to prevent infestation.
If you're more comfortable in a retail environment, there are plenty of souvenir shops in Asmara. Eritrea is a cheap place to eat, shop and explore. Local market stalls do tolerate bargaining, but brick and mortar stores are strict about fixed prices. Gold, silver and pearls are notably cheaper here than in other countries. Gold thread is also of particular interest along with goat skin rugs, clay coffee pots and olivewood carvings.
Medebar Market in Asmara is known for its recycled goods and almost looks like an open workshop where olive tins are made into coffee pots, corrugated iron is turned into metal buckets and old tires are fashioned into comfortable sandals, a very cool place to spend the day wandering.