Almost everyone who visits Peru will end up buying a souvenir of some sort from the vast array of arts and crafts (artesanía) on offer. The best and cheapest place to shop for souvenirs, and pretty much anything else in Peru, is in the street markets that can be found absolutely everywhere.
The country also has its share of shiny, modern shopping centres, especially in the capital, but remember that the high overheads are reflected in the prices.
It is possible to find all kinds of handicraft in Lima. The prices are often the same as in the highlands, and the quality is good. Recommended buys are: silver and gold handicrafts; hand-spun and hand-woven textiles; manufactured textiles in indigenous designs; llama and alpaca wool products such as ponchos, rugs, hats, blankets, slippers, coats and sweaters; arpilleras (appliqué pictures of Peruvian life), which are made with great skill and originality by women in the shanty towns; and fine leather products that are mostly handmade. Another good buy is clothing made from high-quality Pima cotton, grown in Peru.
The mate burilado, or engraved gourd found in every tourist shop, is cheap and one of the most genuine expressions of folk art in Peru. These are cheaper if bought in the villages of Cochas Grande or Cochas Chico near Huancayo in the Central Highlands. The Mantaro Valley is generally renowned for its folk culture, including all manner of artesanía.
Alpaca clothing, such as sweaters, hats and gloves, is cheaper in the sierra, especially in Puno. Another good source is Arequipa, where alpaca cloth for suits, coats, etc (mixed with 40% sheep’s wool) can be bought cheaply from factories. Lima is more expensive, but may be the best bet in terms of quality. Note that if you want to make sure you’re buying genuine alpaca, check that it is odourless when wet or dry; wet llama, in contrast, stinks.
One of the best places in Peru to look for artesanía is Ayacucho in the Central Highlands. Here you’ll find excellent woven textiles, as well as the beautifully intricate retablos, or Saint Mark’s boxes. Cuzco is one of the main weaving centres and a good place to shop for textiles, as well as excellent woodcarvings. Also recommended for textiles is Cajamarca. The island of Taquile on Lake Titicaca is a good place to buy ch’uspas (bags for coca leaves), chumpis (belts) and chullos (knitted hats with traditional ear flaps).