Shares of London-based Farfetch jumped about 16% to $32.59 following the news.
The two companies are also in talks to create a Chinese joint venture, the report said, adding that Cartier-owner Richemont, which has teamed up with Alibaba to create mobile applications, is also considering investing in Farfetch alongside the Chinese e-commerce giant.
Both Farfetch and Alibaba were not immediately available for a comment.
Farfetch, which counts Alibaba's competitors JD.com and Tencent Holdings Ltd among its investors, has been betting on China's burgeoning online luxury goods world. Chinese consumers make up a third of luxury goods purchases worldwide.
Terms of the current and past deals with Tencent and JD would not prevent Alibaba from investing in Farfetch, the Information said, citing a source.
(Reporting by Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli)
