An allegation of sexual assault against a manager at Alibaba Group Holding Ltd. has sparked a firestorm of public criticism, prompting Chief Executive Daniel Zhang to intervene in a situation that has stirred questions about sexual harassment in Chinese workplaces.

An 11-page account of the allegations by a female employee circulated on Alibaba’s internal discussion board Saturday night Beijing time and had become a subject of heated conversation among staff, according to company employees reached by The Wall Street Journal. Screenshots of the internal discussion later made their way to the broader Chinese internet, where they quickly went viral.

According to the woman’s account, the alleged perpetrator was a manager named Wang Chengwen —her supervisor at the time the alleged incident took place in late July. She wrote that Mr. Wang had brought her with him to a client event, where he pressured her to drink excessively. She awoke the next morning naked in a hotel room, she said, and dimly recalled crying the night before as Mr. Wang lay on top of her, kissing and groping her.

The woman didn’t reveal her identity in the account, although company employees said Alibaba staff who saw internal messages in which she alleged sexual assault would have been able to find out who she was.

Mr. Wang couldn’t be reached for comment.

The woman accused several Alibaba managers of mishandling the matter and casting aside her demand that Mr. Wang should be fired. Police detained Mr. Wang after she reported him on July 28, according to her account.

Police in the eastern Chinese city of Jinan, where the woman said the alleged incident took place, said in a statement Sunday that they were investigating the matter and would update the public, without saying whether Mr. Wang was in custody or disclosing other details. The police didn’t respond to requests for further comment.

Alibaba employees confirmed that a copy of the woman’s account on social media was the same as the one that circulated on the company’s intranet. It couldn’t be determined how her story made its way onto social media. Efforts to obtain her contact details from current and former employees in order to solicit comment weren’t successful.

Mr. Zhang, who succeeded Alibaba founder Jack Ma as chairman of the company in 2019, responded Sunday morning with a statement posted on the firm’s intranet, blaming human resources and company managers for mishandling the matter.

Mr. Zhang, who referred to the woman by a nickname, said he was “shocked, furious and ashamed” when he found out about the alleged incident the night before, and called upon the company to cooperate with an ongoing police investigation as well as deal with the matter internally, according to screenshots of the post circulating on social media and company staff who read the post.

A spokeswoman for Alibaba said Sunday that the firm has set up an internal team to investigate the matter and is cooperating with the police investigation. She also said that the firm has suspended “relevant parties suspected of violating our policies and values.” She declined to comment on the company’s initial handling of the woman’s allegations.

The allegations and online criticism are the latest challenge for Alibaba, which has come under intense scrutiny from authorities as part of a wide-ranging moves to rein in the country’s technology sector over the past year.

In an open letter to management on Sunday, more than 6,000 Alibaba employees asked the company to set up a dedicated team to review sexual-assault cases and a hotline for employees to report such issues, according to a copy of the letter seen by the Journal.

According to the woman’s account, police pulled surveillance footage from the hotel that allegedly showed Mr. Wang entered her room four times, at one point staying inside for more than 20 minutes. The woman said police interrogated him for 24 hours.

The woman wrote that Mr. Wang denied to police he had kissed and touched her against her will, instead saying that she had initiated sexual contact.

Allegations of sexual misconduct are especially sensitive in China, where the government is keen to avoid disruptions to public order. Authorities tend not to pursue alleged perpetrators when there is an absence of timely and direct evidence, like surveillance footage, to consider. Victims of sexual misconduct in China say perpetrators often go unpunished even when police intervene, leading some to pursue their own civil lawsuits.

Women’s rights advocates say that long work hours in China’s tech sector combined with deep-seated misogyny and gender imbalances make the industry a breeding ground for sexual misconduct.

A fledgling #MeToo movement in China, echoing its counterpart in the U.S., began in 2018 with allegations by women of rape and sexual harassment perpetrated by Chinese university professors, and spread quickly to industries including technology and arts and culture.

That year, a college student accused Richard Liu, the founder of e-commerce giant JD.com Inc., of sexual assault, sparking a clash between supporters and critics of the #MeToo movement inside China. Authorities in the U.S., where that alleged incident took place, said they found no basis to charge Mr. Liu, while the result of a civil lawsuit filed by the woman is pending. Mr. Liu has said the U.S. prosecutor’s decision showed that he has violated no law. JD.com has said the company was committed to serving its customers.

The Alibaba allegation comes just days after Chinese police detained Canadian pop star Kris Wu, following online allegations that he repeatedly deceived young women into having sex with him. Before the police announcement, Mr. Wu denied the allegations and said he would willingly go to jail if they were true. Mr. Wu remains in custody.

An explosion of anger filled comment sections on Weibo over the weekend, with people lamenting both the alleged assault and its handling by Alibaba, China’s largest e-commerce company. A hashtag referring to the woman’s allegations topped Weibo’s trending list on Sunday morning, with related posts attracting more than half a billion views.

“When you discover one cockroach in the room, there will already be a whole bunch of others,” one Weibo user wrote in a comment that garnered tens of thousands of likes.

According to the accuser’s account, when she woke up in the hotel room on the morning of July 28, she found the clothes she had worn the day before on the floor but couldn’t find her underwear. She said she saw an opened condom package on the nightstand.

She said that she sought help from Mr. Wang’s supervisors starting Aug. 2. She wrote that a manager eventually called her to tell her to calm down and inform her that Mr. Wang couldn’t be fired despite earlier suggestions by some of the supervivors he would be. “My heart felt like dead ashes,” she wrote.

“The most powerful weapon in the world is the determination to survive.” she said. “I won’t give up!”

—Qianwei Zhang contributed to this article.

Write to Chao Deng at Chao.Deng@wsj.com and Keith Zhai at keith.zhai@wsj.com