Head straight to the main market in the upper part of Puerto Escondido for a true local's shopping experience. You'll taste local flavors (fresh fish and shrimp, amazing juices, etc.) at the best prices. Skip the tchotchkes, but stock up on bars of Oaxacan chocolate and fresh fruit to snack on! Also a great place to pick up hand-made bowls to bring back as gifts (or for yourself).
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The fresh catch you'll find at local market, Mercado Benito Juarez, is not to be missed. You'll see gorgeous red snapper among other things like shrimp, dorado, tuna, and sailfish. Eat them whole and grilled if that's your thing, or the vendors are happy to filet.
Also popular are dried fish, which you'll find everywhere, and see lots of locals buying!