The blast hit the Sadr City, the same district where a massive truck bomb ripped through a wholesale vegetable market just two days before, killing at least 54 people.
There was no immediate claim of responsibility for today's attack, but the jihadist Islamic State group frequently targets Shiites, whom it considers to be heretics.
In an attempt to cause maximum casualties, IS often strikes areas such as markets and cafes where crowds gather.
IS overran large parts of Iraq in June 2014 and also holds significant territory in neighbouring Syria.
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Iraqi forces have since regained ground from the jihadists, but much of western Iraq remains outside government control.
Even before the IS offensive, bombings targeting civilians in Iraq were a major threat, killing hundreds of people a month.
With jihadists occupied with fighting elsewhere, the frequency of blasts in Baghdad has declined since the IS offensive, but there have still been a number of major bombings in the city in recent months.