China's State Administration for Market Regulation (SAMR) made the announcement on Thursday.
Regulators have previously warned Alibaba about forcing merchants to sign exclusive deals which prevent them from offering products on rival platforms.
Financial regulators will also meet with Alibaba's financial technology offshoot Ant Group in the coming days.
The investigation into monopolistic behaviour centres on the so-called "choosing one from two" practice.
This requires merchants (sellers) to sign exclusive co-operation pacts, preventing them from offering products on rival platforms
China's tech giants such as Alibaba and Tencent are facing increased scrutiny by the Chinese government, which is concerned about their growing size and power.
Regulators are worried about the millions of users they have amassed and the influence they have over daily life in China, including shopping and payments.