China’s Consumer Startups Fight for Survival as Demand Falters

China’s economic malaise is taking down some of its rising consumer startup stars, which had been hyped as the country’s replacement for Western brands from Coca-Cola Co.to Haagen Dazs Co.

Instead, firms like drinks maker Chi Forest and ice cream brand Chicecream are seeing their fortunes turn as venture capital investment into the country’s consumer sector plunged 93% last year from 2018’s peak, according to data provider Preqin Ltd.

Meanwhile, companies that listed before the downturn — including cosmetics maker Yatsen Holding Ltd., toy company Pop Mart International and tea and baked goods producer Nayuki Holdings — ...