Malaysia’s Coffee Chain Revolution: How Zus Coffee and Kenangan Coffee Are Redefining Work and Culture Beyond Starbucks

For decades, Starbucks has sat at the pinnacle of Malaysia’s café culture—a symbol of cosmopolitan work, relaxation, and digital connectivity. From students hunched over laptops to entrepreneurs hashing out their next big idea, its green-and-white logo was synonymous with modern productivity. Yet, beneath the surface, a seismic shift has taken place. Local disruptors — Zus Coffee and Kenangan Coffee — have launched an audacious challenge, leveraging hyper-local expansion, tailored flavors, and competitive pricing. As their networks saturate every urban corner, they don’t just undercut Starbucks’ market share; they are quietly reshaping the fabric of where and how Malaysians work, gather, and innovate.

In this exposé, we’ll uncover the strategies fueling this transformation, dissect what it means for remote professionals and brand loyalists, and anticipate who holds the keys to Malaysia’s caffeinated future.

The New Battleground: Store Saturation and the Urban Workscape

Hyper-local density as a new value proposition. The defining statistic in Malaysia’s current coffee wars is not just about taste or ambiance—it’s about accessibility at scale. Zus Coffee now stands as the undisputed leader, boasting 743 stores nationwide, with an aggressive plan for 107 new Malaysian outlets in 2025 and a bold regional venture into the Philippines and Singapore. Kenangan Coffee, a close challenger, operates approximately 130 stores (with a public target of 200 by 2026), while Starbucks lags behind with only 320 outlets.

This urban saturation is more than a numbers game. In a nation where remote work and WiFi-dependent collaboration are becoming the norm, proximity is power. The sprawling networks of Zus and Kenangan mean that in nearly every city block, a workspace—powered by caffeine and connectivity—is just steps away. For gig workers, students, and freelancers, this consistency in location translates to greater ease of doing work, making traditional destination cafés seem like outdated relics. Although neither Zus nor Kenangan publicly boast about WiFi stability, their sheer density inevitably raises the odds of finding a suitable, well-connected space compared to a sparser Starbucks network.

Pushing Past the Global Standard: Pricing, Localization, and Loyalty

Affordable luxury meets local identity. Starbucks, once celebrated for its global taste and aspirational branding, now faces homegrown contenders who have weaponized pricing and local knowledge. An Americano from Zus or Kenangan starts at just RM7.45—a significant undercut compared to the international premium, where Coffee Bean lingers at RM11.13 and Starbucks is positioned even higher.

This isn’t simply a race to the bottom. Zus Coffee has pioneered “local first” innovation—infusing drinks with palm sugar for the Malaysian palate, while Kenangan adapts offerings across markets, introducing flavors like purple yam coffee in the Philippines or tweaking recipes for each city’s taste. This deep localization not only drives loyalty but creates a cycle of repeat visits—a crucial factor for those seeking productive work environments or community gathering spots.

Profit, Expansion, and the Business of Everyday Spaces

Scale, stability, and financial resilience. Operational prowess is not just about opening stores—it is about profitable, sustainable growth. Kenangan Coffee’s recent achievement of EBITDA positivity in Malaysia (with an impressive 18% net EBITDA margin group-wide) signals a maturing business model, while their US$200 million annualized run rate shows that scale can drive not only customer value but also operational efficiency.

Zus, meanwhile, has managed to keep core drinks affordable even as global Arabica prices spike—a testament to their bulk procurement and operational discipline. Their ability to raise prices just 3% in the face of the highest commodity costs in nearly five decades speaks volumes about their commitment to accessibility and value.

These victories aren’t just business milestones—they represent a reshaping of urban life. As more Malaysians rely on their neighborhood cafés as de facto office spaces, the continued expansion of Zus and Kenangan becomes a public good, boosting productivity and digital inclusion.

Digital Ecosystems: Loyalty Programs and Seamless Experiences

Beyond coffee: Building digital loyalty and community. While Starbucks popularized the rewards app, local challengers are upping the ante with agile, locally-tailored digital platforms. Kenangan’s app doesn’t just track purchases; it offers free vouchers, “surprise” priority access, and exclusive perks that integrate with daily routines. Zus, leveraging its widespread reach, makes it frictionless for users to transition from one store to another—an essential feature for itinerant workers or students on the go.

For a generation that expects instant gratification and flexibility, these digital ecosystems are redefining how loyalty translates into habitual patronage, directly impacting the ease with which users can settle in, plug in, and get down to work.

Comparative Analysis: Rethinking Work-Friendly Cafés in the Malaysian Context

Location density and work readiness outpace legacy “third places.” For years, Starbucks was the benchmark for digital nomads seeking stable WiFi, ample power sockets, and welcoming ambiance. But in today’s Malaysia, a new calculus applies:

• Density = Reliability: With more than double the locations of Starbucks (Zus: 743 vs. Starbucks: 320), finding an available seat—or a backup option nearby in case of crowding or WiFi issues—is simply easier with local chains.
• Localized Offerings = Repeat Visits: Custom menus and neighborhood-centric branding foster greater attachment among regulars, who are more likely to return for work or leisure.
• Affordability = Accessibility: Lower prices democratize access to “third spaces,” making it feasible for more Malaysians to use cafés as work zones.
• Digital Perks = Seamless Experience: Local apps reinforce habit loops, providing frictionless rewards and making loyalty tangible for day-to-day workers.

Multiple Perspectives: A Shifting Value Proposition

For remote professionals and students:
The new reality means less time spent scouting for a free table, more opportunities for spontaneous collaboration, and increased reliability when deadlines loom. The proliferation of outlets enables productive routines that simply weren’t possible when Starbucks held a monopoly on aspirational “work pods.”

For legacy brands like Starbucks:
The challenge is twofold. Not only must they reconsider pricing and menu strategies, but they also need to reimagine their store footprint and digital engagement. Their traditional “destination café” model is undercut by a landscape where mobility and proximity reign supreme.

For the broader market:
The rise of Zus and Kenangan signals a localism renaissance, where Malaysian tastes, traditions, and work habits shape the café experience. Local chains, by embedding themselves in the daily rhythms of urbanites, are turning coffee shops into vital nodes of the nation’s digital work infrastructure.

As Malaysia’s urban future unfolds, the café is no longer an occasional treat or an imported luxury; it is the pulse of everyday productivity—a model of accessibility and adaptability, where the next frontier will be won by those who best serve both the workforce and the community.

Forward-Looking Implications: Beyond Coffee, Toward Connected Communities

From store networks to digital connectivity: Malaysia’s evolving “third space.” The rapid expansion of Zus and Kenangan is not just a business story—it is a tale of how modern societies adapt to new patterns of work and connection. With more Malaysians freelancing, launching startups, or simply seeking respite in work-friendly environments, the local café is emerging as a linchpin of urban infrastructure.

Yet, challenges remain. As these chains race to grow, they will face rising operational costs, changing consumer tastes, and the imperative to deliver not just quantity, but quality—especially as digital experiences and in-store comforts become the next competitive battleground. Monitoring performance metrics like EBITDA positivity and revenue proxy will be critical in distinguishing sustainable leaders from fleeting trendsetters.

Moreover, the absence of explicit WiFi quality metrics poses an open question. As the competitive landscape matures, expect the next generation of local chains to invest in tech partnerships, connectivity upgrades, and even new “work+coffee” formats. The winners will be those who realize that in a digital economy, the best coffee shop is one that meets customers exactly where they are—physically, culturally, and digitally.

Conclusion: The Strategic Future of Coffee-Driven Workspaces

The Malaysian café industry is at a critical inflection point. Local powerhouses like Zus Coffee and Kenangan Coffee are not just challenging Starbucks—they are redefining the rules of engagement for a digital-first, hyper-connected generation. Their blend of aggressive expansion, affordable pricing, and local flavor innovation has made them more than coffee providers: they are enablers of Malaysia’s new work culture.

As the landscape shifts, the question for brands and their stakeholders is not whether to compete—but how to remain relevant in the face of democratized access and heightened expectations. The strategic future will belong to those who see cafés not merely as beverage outlets, but as vital public platforms for productivity, connection, and creativity.

Ultimately, the real victory will go to those who can turn every neighborhood into a hub of potential—one that powers not only Malaysia’s digital workforce but also its dreams for an inclusive, innovative tomorrow.