Kaola, owned by Nasdaq-listed NetEase Inc, sells apparel, household appliances and other products, and is the biggest among Chinese shopping sites selling imported goods, according to a report from consulting agency iiMedia.
Both Alibaba and NetEase did not immediately respond to requests for comment.
The news comes a day after Alibaba reported better-than-expected quarterly revenue and profit, aided by growth in its e-commerce and cloud computing businesses.
Amazon.com Inc's Chinese joint venture was also in talks about a merger with Kaola, business magazine Caijing had reported in February.