Missiles launched by the Arab alliance's fighter jets hit a market selling the mild narcotic leaf qat near the Red Sea fishing town of Khoukha.
Rescue workers on Friday night were battling a blaze in the market caused by the attack and pulling bodies out of the rubble, some of which were burnt beyond recognition, according to Hashim Azazi, deputy governor of Hodeidah province.
"All of those killed were civilians, none were holding weapons," Reuters reported Azazi as saying.
Yemen’s war pits President Abedrabbo Mansour Hadi's internationally recognized government against Houthi rebels allied with forces loyal to former president Ali Abdullah Saleh.
The fighting has intensified since a Saudi-led coalition intervened in support of Hadi in March 2015 after the Houthis seized Sanaa the previous September.
But the Arab force has come under repeated criticism over civilian casualties in Yemen.
In December, it acknowledged that it had made "limited use" of British-made cluster bombs but said it had stopped using them.
On Thursday, Amnesty International accused the coalition of using banned Brazilian-manufactured cluster munitions in raids on residential areas in northern Saada province.
In mid-February, a coalition airstrike killed eight women and a child at a funeral reception near the rebel-held Yemeni capital, Sanaa.
The conflict in Yemen has left more than 7,400 people dead and 40,000 wounded since the coalition intervened on the government's side in March 2015, the United Nations says.
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