Electroless deposition on zinc and its alloys is challenging because of the negative standard potential of zinc, the formation of poor surface layers during oxidation in aqueous solutions, and extensive hydrogen evolution. Therefore, there are only few reports of electroless deposition on Zn and its alloys, neither of them on micro/nano powders. Here, we propose a two-step process that allows the formation of compact, uniform, and conformal Ni/NiP shell on Zn-based alloy microparticles without agglomeration. The process utilizes controlled galvanic displacement of Ni deposition in ethanol-based bath, followed by NiP autocatalytic deposition in an alkaline aqueous solution. The mechanism and effect of deposition conditions on the shell formation are discussed. Thermal stability and functional analysis of core-shell powder reveal a thermal storage capability of 98.5% with an encapsulation ratio of 66.5%. No significant morphological change of the core-shell powder and no apparent leakage of the ZnAl alloy through the Ni shell are evident following differential scanning calorimetry tests. Our two-step process paves the way to utilize electroless deposition for depositing metallic-based functional coatings on Zn-based bulk and powder materials.