The online shopping site, called 11 Main opened on a beta, or test, basis for consumers and is invitation-only in terms of the merchants it features, the site said in a statement.
Visitors are met with a "We're Opening Soon" message, which adds: "Our shop owners are currently unpacking and getting settled."
The site "carefully selects merchants, making some of the best and most differentiated boutiques available to shoppers", 11 Main said in a press release Wednesday.
"At 11 Main, we're passionate about the shops we invite and helping them grow," Mike Effle, president and general manager of 11 Main, said in the release.
11 Main, Inc. said it is an Alibaba Group company.
The marketplace, which hosts more than 1,000 merchants selling products ranging from clothing and interior goods to arts and crafts, will help Alibaba compete with Amazon and eBay, Dow Jones Newswires reported Wednesday.
The company plans to add other sales categories, charge as little as half the commission of other venues at 3.5 percent, and screen merchants for the quality of their goods and service, Dow Jones added.
The site is joining a crowded landscape with big players like Amazon, startups such as Etsy and traditional retailers with an online presence like Wal-Mart, the report said.
Separately, Alibaba announced its third deal in a week on Wednesday, saying it will absorb mobile browser developer UCWeb in what it called the "biggest" merger in the country's Internet industry.
Planned listing
The firm has stepped up acquisitions to expand beyond its traditional online shopping business ahead of a planned US listing that could raise around $15 billion, putting it on a par with Facebook's $16 billion IPO in 2012.
On Tuesday, the company unveiled an agreement with state-backed Shanghai Media Group to develop an entertainment platform and last Thursday said it will pay $192 million for a 50 percent stake in China's top football club, Evergrande.
Alibaba will take the one-third stake in UCWeb that it does not already own, it said in a statement.
"UC will be fully integrated into Alibaba Group. This integration will be the biggest merger in the history of China's Internet industry," Alibaba said, but gave no value for the deal.
UCWeb chief executive Yu Yongfu said the deal would value his company at more than $1.9 billion, according to a company memo posted online.
He compared the transaction to a move last year in which China's most popular search engine Baidu fully acquired smartphone app company 91 Wireless Websoft for that amount, showed the memo. A company spokesman confirmed its authenticity.
Alibaba said it would settle the deal through a combined cash and stock swap transaction.
The deal would draw more mobile device users to Alibaba platforms, which have lost out to more nimble competitors, analysts said.
"Alibaba is experiencing a drop in traffic on both personal computers and mobile devices, while its source of traffic has been unstable. So it's acquiring (UCWeb) to ensure traffic inflow," Zhuo Saijun, an analyst at Beijing-based consultancy Analysys International, told AFP.
Founded in 2004, UCWeb is a mobile Internet software and services provider based in the southern city of Guangzhou, which claims 500 million quarterly active users worldwide for its flagship browser.
Expanding widely
Alibaba operates China's most popular online shopping platform, Taobao, which is estimated to hold more than 90 percent of the online market for consumer-to-consumer transactions.
Previous acquisitions have allowed the e-commerce firm to expand into entertainment and logistics.
Last month, Alibaba acquired a 10.35 percent stake in Singapore Post, the city-state's main postal service, for $249 million as part of a strategic cooperation deal.
Prior to that, Alibaba and a private equity fund backed by the company's founder Jack Ma said in late April they would pay $1.22 billion for a stake in China's leading online video platform Youku Tudou.
The company has also made other forays into entertainment, including the purchase of a majority stake in Hong Kong-listed ChinaVision Media Group in March.
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