Alibaba Group Holding Ltd. is planning to let employees and other people close to the Chinese e-commerce buy some shares in its impending initial public offering, people familiar with the matter said.

The kind of share program it is conducting, known informally as a "friends and family" plan, lets employees and others buy some shares at the IPO price, before the stock begins trading publicly. That IPO price is normally available only to professional investors and a limited number of individual investors, who buy...