Where is good to buy quality souvenirs/handicrafts in KK city?
Wander along Gaya street, there are a number of souvenir shop's. There are also a couple adjacent to Centre point mall. You could also try the Foreshore (Philippino) Markets.
As Big w mentioned the Philippino covered market on the water front has a large range of "Stuff" to choose from, the pathways between the stalls are narrow or very narrow, so watch out for bag/purse/cash/camera thefts, just be aware of it.
We have wandered around there most visits and haven't had a problem.
This is the cheapest place in KK and they also expect you to haggle and they will drop the price. The problem then is you end up with a pocket full of very small change which has no value, we pay the price offered or give the change as a tip.
The dearest place to buy are the big malls Imago, Suria Sabah, One Borneo(not worth the trip).
Opposite Suria Sabah mall is firstly Wisma Sabah(cannot miss it, it has a large murial on the front.
I cannot recall the name but on the ground floor walk past the tour operator shops follow the path around and there is an excellent Craft shop, their English is perfect you will have no problems asking for 2-4-1.
Next is Wisma Merdeka again cheep but you have to wander around to find what you want.
Wisma Yakim is the next shopping centre just behind the Hyatt Regency Hotel all of the above are 200m from the entrance of the Suria Sabah Mall in Segama district.
The Centre point shopping centre is a little further away in Api-Api district, there is a small shop on the ground floor, not very good,the centre is where KK local shop it has some western food outlets, they also have a good bureau de change if needed.
If you are going to research about it then the correct spelling is FILIPINO Market and yes I recommend it too.
The "handicraft market" as named by Sabah Tourisim is along the waterfront just after the fish market,
(Philippino named after King Philip II of Spain 1580's) is open all day and into the late evening.
The prices are generally low but we normally pay what is asked for, the difference is maybe 50 pence, they have to make a living also.