Which Location to Register For Sellers in C2C E-Market in China? A Study on Taobao.Com

As there are a large number of sellers and products on C2C shopping websites, consumers are faced with the problem about how to choose the right goods whereas sellers are confronted with the problem concerning how to set up online shops and provide commodities. Based on signaling theory and research findings about regional economics, we put forward an analysis model between the difficulty in identifying quality of goods and the quality signal intensity of geographic location, and make an empirical test by the actual data from Taobao.com. What this study finds is that, under the environment of C2C e-commerce in China, the geography location may affect the distribution of these online stores and their sales performance. For local specialty products, the quantity and the average sales of seller stores from the origin locations are more than those from the other locations; for the branded consumer electronics, the quantity and the average sales of seller stores from the first-tier cities are higher than those from other cities.