Among the towns of Kerala, Kollam is second only to Kodungallore in historic antiquity and was a renowned international emporium of trade in the ancient world. It was the capital of the powerful kingdom called " VENAD" which came into prominence in the 9th century A.D. According to some historians, the Malayalam era called the "Kollam era" was established by King Udaya Marthanda Varma, King of Kollam in 825. AD In the earliest days Phoenicians, Persians, Greeks, Romans, Arabs and the Chinese used to frequent the port. The descriptions by famed travellers like Marco Polo, Ibn Batuta, Sulyman of Siraf and others clearly highlighted the historical importance of Kollam as a commercial town.

Kollam maintains this tradition even today and it is one the major industrial and commercial centres of Kerala. It is the nerve-centre of Kerala's cashew industry.