Hi,
If you are using the "HikaMarket Location Search module" for the search ; that module use a view that you can override.
By default the view display a simple input text ; but you can see to display a dropdown instead.
If you want to make it dynamic, the idea is to load the custom field in the database and extract the different values (from "field_values").
Regards,
Jerome - Obsidev.com
HikaMarket & HikaSerial developer / HikaShop core dev team.
Also helping the HikaShop support team when having some time or couldn't sleep.
By the way, do not send me private message, use the "contact us" form instead.