ZUS Coffee’s Southeast Asia Expansion: How Local Partnerships Are Powering a New Era in Regional Coffee Culture

In late 2019, a modest delivery-focused coffee kiosk opened in Malaysia, quietly setting the stage for what would become one of Southeast Asia’s most disruptive retail stories. Fast-forward to 2025, and ZUS Coffee has eclipsed industry titans like Starbucks to claim the crown as Malaysia’s largest, fastest-growing coffee chain—with more than 1,000 stores in the region and ambitious plans to reshape the competitive landscape. Yet it’s not just tech innovation or pricing wars that are fueling this ascent. Instead, ZUS is carving a new blueprint for regional dominance: leveraging strategic local partnerships, joint ventures, and community alliances to accelerate growth, adapt rapidly to changing consumer needs, and de-risk entry into notoriously fragmented Southeast Asian markets.
This exposé traces ZUS Coffee’s meteoric rise, the strategic calculus behind its “glocal” approach, and what its playbook means for the future of food retail in one of the world’s fastest-growing coffee regions.

The Catalyst: From Malaysian Startup to Southeast Asia’s Coffee King

Historic Surge and Market Dynamics: ZUS Coffee’s origins are rooted in crisis-driven innovation. At a time when the COVID-19 pandemic forced traditional cafés to shutter, ZUS pivoted swiftly, riding the wave of surging online demand and digital orders. By 2024, its net profits had tripled to RM37 million, and it had overtaken Starbucks in Malaysia, with 743 stores and a regional footprint that would soon cross the 1,000-outlet mark. This growth is no accident. It is the result of intentional choices—tech-enabled delivery systems, lean operational models, and, most critically, an aggressive partnership-centric expansion that sidestepped the pitfalls of organic scaling.
Regional Ambitions: As of late 2025, ZUS Coffee employs more than 6,000 people, operates 900+ stores, and is backed by a RM250 million investment war chest, targeting nearly 200 new stores for the year. This expansion is carefully orchestrated to cover Malaysia, the Philippines, Singapore, Thailand, Indonesia, and Brunei—each with its own market challenges and opportunities.

Partnerships as the Engine of Growth: The “Glocal” Playbook

Strategic Local Alliances: ZUS’s approach goes beyond mere market entry. In the Philippines, its joint venture with Choi Garden has delivered instant local credibility, seamless navigation of regulatory hurdles, and rapid access to real estate and supply networks—enabling an unprecedented rollout of 80 stores in 2025 alone. Similarly, the tie-up with Indonesia’s Kapal Api Group unlocks distribution, sourcing, and brand acceptance in a market previously marked by fierce rivalry and fragmented players.
Blueprints for Non-Linear Scale: These partnerships exemplify what analysts call “non-linear scale”—the ability to grow faster, share risks, and adapt menus with culturally resonant products, all while sidestepping the bottlenecks of solo expansion. As source analysis from GrowthHQ underscores, joint ventures reduce entry barriers, prime locations, and drive cost efficiency by leveraging established infrastructures.
Digital-First Loyalty: More than 70% of ZUS sales already come through its app, powering personalized rewards and local menu adaptations. This digital-first ethos not only keeps operational costs lean but also provides the data backbone for rapid consumer insight and adaptation—a crucial advantage in markets where buyer preferences can shift overnight.

Breaking Down the Regional Expansion: Country-Specific Tactics & Opportunities

Malaysia—The Heartland and Profit Core: With 743 stores, Malaysia remains ZUS’s engine room. Here, the focus for 2025 is on deepening ecosystem ties: partnerships with F&B conglomerates such as Fraser & Neave, direct sourcing from smallholder coffee cooperatives, and a move toward supply chain vertical integration to enhance traceability and cost control. Localizing bean sources is not just an ethical imperative—it’s a strategic edge as scale shifts supplier power.
Philippines—Scaling Through Synergy: The Choi Garden joint venture is a template for national scale. Recommendations for 2025 include expanding co-branded kiosks into secondary cities like Cebu and Davao, integrating with e-commerce and food delivery heavyweights (e.g., GrabFood, Shopee), and forming alliances with farmer co-ops to tap local robusta bean production. This multifaceted approach mitigates regulatory risks and keeps the model agile and affordable for urban digital natives.
Singapore—Premium Urban Penetration: With six new outlets, ZUS targets high-income, high-density districts by allying with property giants (like CapitaLand) and fintech players (such as GrabPay) for frictionless payments. Partnerships with urban farms offer a sustainable sourcing angle, appealing to rising ethical awareness among Singaporean consumers.
Thailand—First-Mover Credibility: Early store launches have been anchored by high-impact promotions (e.g., free Spanish Lattes). For scale, analysts recommend a joint venture with CP Group to secure supply chain and logistics in Bangkok and Chiang Mai, as well as dairy partnerships to localize menu fusions (think Thai milk tea lattes). The app-centric model is a natural fit in a market where mobile penetration leads ASEAN.
Indonesia—Deepening Mass Market Reach: Kapal Api Group provides instant scale and market legitimacy, but the next step is direct engagement with Indonesia’s 1.5 million smallholder farmers for arabica and robusta beans—a move that could cement traceability and ethical sourcing, filling gaps left by rivals like Starbucks and Luckin Coffee. Integration with Gojek’s delivery infrastructure is also a must.
Brunei—Micro-Market Testing: The strategy in Brunei is a cautious pilot, leveraging partnerships with royal-linked firms for exclusive kiosks and sourcing beans from Borneo producers. This “data first” approach will inform wider micro-market tactics across under-served Southeast Asian nations.

Comparative Landscape: ZUS vs. Starbucks, Luckin Coffee, and Local Kopitiams

Starbucks—Legacy Challenger: Despite its global reach, Starbucks has stumbled in Malaysia, overtaken by ZUS’s local price disruption and aggressive digital loyalty. Per Verdict Foodservice, Starbucks’s premium positioning and slower adaptation to local flavors have made it vulnerable to nimble competitors.
Luckin Coffee—Price Warrior: Chinese juggernaut Luckin Coffee has attempted to undercut rivals on cost, but faces pushback in markets where consumers value local flavor, ethical sourcing, and personalized experiences—areas where ZUS’s tech-driven, partnership-enabled model excels.
Kopitiams and Teashops—Substitute Threats: Traditional kopitiams and tea houses thrive on deep cultural resonance and affordability. ZUS’s answer? Co-innovate SKUs (e.g., local fusions, milk tea lattes) and position partnerships to deliver authenticity and variety, converting substitute threats into collaborative potential.

Inside the Strategic Framework: Partnerships, Risks, and Mitigation

Joint Ventures for Speed: Local alliances have powered ZUS to open 1,000 stores faster than any rival. For 2025, the goal is 200 new outlets—50%+ faster rollout via at least three new deals mirroring the Philippines model.
Supply Chain Resilience: Medium-term tactics focus on direct engagement with smallholders and digital sourcing platforms, closing the traceability gap and supporting cost-savvy, ethically-minded branding. As reported by GCR Magazine, this is ZUS’s next frontier—necessary for long-term differentiation.
Tech-Enabled Co-Branding: Integrating partner apps (e.g., Gojek, Grab) will drive cross-loyalty and boost digital sales from 70% to a projected 80%, cementing ZUS’s leadership in customer engagement and retention.
Regulatory and Competition Risks: In markets like the Philippines and Indonesia, partnerships sidestep labor and compliance pitfalls, while collaborative SKU innovation outpaces global rivals.

Porter’s Five Forces: Partnership-Driven Advantage

Intense Rivalry: ZUS leverages local player credibility to rapidly build loyalty and market share.
Supplier Power: Direct farmer integration shifts bargaining leverage, reducing risk.
Buyer Power: Digital engagement ensures personalized offers and frequent touchpoints.
Entry Barriers: Joint ventures deliver site access and regulatory clearance.
Substitutes: Local fusions and menu innovation neutralize threats from kopitiams and teashops.

Challenges on the Horizon—and How Partnerships Mitigate Them

Risks of Scale and Quality: Critics argue that rapid scaling can dilute brand quality and expose ethical gaps in sourcing. While ZUS has yet to fully document farm-level integration, its partnerships (e.g., with Kapal Api in Indonesia) are engineered to assure compliance and local adaptation.
Traceability and Ethics: Compared to Starbucks’s robust ethical sourcing, ZUS faces pressure to implement supply chain transparency across all new markets. Analysts recommend urgent investment in direct farmer programs and traceability certifications as a “must” for 2026 and beyond.
Financial Sustainability: The RM250 million investment pool is formidable, yet success hinges on channeling at least RM50-100 million into supply and expansion partnerships to capture the projected RM1 billion+ Southeast Asia coffee opportunity by 2029.

“Partnerships are the oxygen of non-linear growth in Southeast Asia. They don’t just speed entry—they multiply resilience, local relevance, and long-term brand loyalty.”
— GrowthHQ Analysis, 2025

Forward-Looking Insights: What ZUS Coffee’s Rise Means for Regional Food Retail

Partnership-Led Ecosystem Building: ZUS Coffee’s aggressive partnership model is rewriting the Southeast Asian coffee narrative. Rather than relying on slow organic scaling, ZUS is forging symbiotic alliances—joint ventures for entry, supply chain partnerships for resilience, and tech platforms for engagement.
Digital Dominance and Consumer Adaptation: The shift to app-driven sales (70%+, targeting 80%) is not just a channel strategy; it’s a feedback loop for rapid menu adaptation, geo-targeted promotions, and customer insight. In secondary cities and micro-markets alike, ZUS’s “glocal” pivot allows the brand to stay ahead of global and local competitors, responding in real time to changing tastes and expectations.
Supply Chain Innovation as Defensive Moat: As ethical sourcing and traceability become consumer baseline expectations, ZUS must close the gap. Looking ahead, direct farmer engagement, supply localization (10%+), and certifications will be essential for securing long-term market trust.
Competitive Dynamics: Beyond overtaking Starbucks in Malaysia, ZUS is positioned to fill gaps left by price-focused rivals like Luckin Coffee—leveraging local partnerships to deliver authenticity, variety, and price disruption simultaneously.
The ASEAN Coffee Boom: With the market growing at 5% annually and Malaysia alone projected to hit RM1 billion by 2029, the stakes are enormous. ZUS Coffee’s blueprint—tech, local flavor, rapid scale—could redefine food retail across Southeast Asia, inspiring both imitators and new cross-sector collaborations.

Conclusion: The Future Is “Glocal”—Invest in Partnerships or Get Left Behind

ZUS Coffee’s journey from pandemic-era startup to regional juggernaut is more than a business success story—it’s a masterclass in strategic adaptation. By elevating partnerships as the core driver of expansion, ZUS demonstrates that “glocal” thinking is not a buzzword, but the new operating system for ambitious brands in Asia’s dynamic food retail sector.
With over 1,000 stores, 6,000 employees, and a war chest exceeding RM250 million, ZUS’s next moves—especially deeper engagement in Indonesia and the Philippines—could determine the fate of regional market share, consumer trust, and competitive relevance for years to come.
Decision makers across the sector should take heed: the future belongs to those who forge resilient, adaptive, and locally-attuned collaborations. To win in Southeast Asia’s coffee boom, partnership isn’t a strategy—it’s survival.