The OBJ file format uses ASCII format (plain text) with a simple syntax. The main sections of OBJ files contain vertex lines of type (type v), texture coordinates (type vp), vertex texture (vt) normal coordinates (type vn), and faces (type f).
As this file format is using ASCII, it is making it possible to edit the files in a text editor.
It’s important to keep in mind that the OBJ file format won’t let you store color and texture information itself, these info must be stored in another file format called the Material Template Library file (MTL file) format. When actually using these two files together, rendering a multi-color textured model is possible.
The OBJ file format is more and more often used to share 3D models in graphics applications because it is offering a good import and export support from all the most used CAD software. What makes it so popular is also its ability for multi-color 3D printing, which is a big advantage compared to the STL file format, which is not supporting color and texture information.