Tesco sells stake in non-core asset Lazada to Alibaba

British retail giant Tesco has begun its sale of non-core assets as it focuses on reviving its main grocery arm, offloading approximately half of its stake in Lazada to e-commerce heavyweight Alibaba for a cool 129 million US dollars (90.6 million pounds).

The UK supermarket chain, which previously held a 19.6 percent stake of the South East Asian e-commerce platform, has handed over 8.6 percent of Lazada's shares to Alibaba, retaining a 8.3 percent hold in the online business following further investment from Abruzzo. Tesco first invested in the German-owned online platform in December 2013, which currently sells apparel, homeware, books and electronics in Thailand, Malaysia, Indonesia, Vietnam and the Philippines.

Tesco offloads stake in Lazada to Alibaba

Alibaba, which was recently claimed the title of world's largest retailer has been busy boosting its international presence within the e-commerce industry. The Hangzhou-based giant aims to acquire 500 million US dollars worth of new and existing shares in Lazada to become the controlling stakeholder. The acquisition comes after the Chinese retailer injected over 100 million US dollars into online Japanese luxury store Mei.com and lead a 500 million US dollar investment round into Snapdeal, an Indian based online retailer last year.

"Globalization is a critical strategy for the growth of Alibaba Group today and well into the future," said Michael Evans, President of Alibaba in a statement. "With the investment in Lazada, Alibaba gains access to a platform with a large and growing consumer base outside China, a proven management team and a solid foundation for future growth in one of the most promising regions for e-commerce globally."

"This investment is consistent with our strategy of connecting brands, distributors and consumers wherever they are and support our ecosystem expansion in Southeast Asia to better serve our customers." The deal sees Lazada valued at 1.5 billion US dollars, as Alibaba aims to invest approximately 1 billion US dollars.

News of the share sale comes a day before Tesco is due to release it's annual results, in which te retailer is predicted to announce further disposals of non-core assets. The supermarket group said to be set to sell a number of its side UK businesses, including Dobbies Garden Centre chain, Harris & Hoole coffee shop chain and Giraffe restaurant chain. Tesco declined to comment on news of the potential sales.