Celebrities including "Memoirs of a Geisha" movie star Zhang Ziyi criticised the brand, while singer Wang Junkai said he had terminated an agreement to be the brand's ambassador.
The videos featured a female Asian model struggling to eat pizza and other Italian food with chopsticks, with a male voiceover imitating the Chinglish accent and mocking Chinese pronunciation of the brand's name.
Early Wednesday morning, in a chat on Instagram between a netizen named "michaelatranova" and someone using the personal account of Stefano Gabbana, one of the brand's co-founders, Gabbana allegedly made insulting references toward China and Chinese people.
That makes it potentially risky territory for someone like Mr Gabbana, who is famous for picking online feuds and in the past has used his Instagram account to make barbed attacks.
Edward Gu, CEO of modelling platform Talentreet, has staged a one-man protest against Italian luxury fashion house Dolce & Gabbana.
In another statement, the label said that the now-cancelled Shanghai fashion show was "something that we created especially with love and passion for China and all the people around the world who love Dolce & Gabbana ..."
She also posted the following image, which translates to "you dropped your shit, I'm returning it to you", according to Shanghaiist.More news: Trump's asylum restrictions blocked by federal judge
The gaffe is not the first by Dolce & Gabbana in China, even as it pushes to increase its appeal there.
"We have always been very much in love with China and we always visited this country and many cities many times and we love your culture", explains Dolce. So has the account of Stefano Gabbana.
Several screenshots showed Gabbana's Instagram account referring to China with crude terms and emoji as he defended the promotional videos. Following its racist new ad and alleged comments around the Chinese, e-commerce sites such as Tmall, JD.com, Yanxuan, and Vipshop have pulled the luxury brand's products off its sites.
The accusations of racism and racial stereotyping were confirmed after an Instagram direct message conversation between Stefano Gabbana and the fashion writer Michaela Phuong was shared by Diet Prada. The company would do well to acknowledge its mistakes and listen to its customers and social media commentary.
But there was an increased chance such controversies could affect sales as buyers became more discerning about brands, some analysts said. Many in China called them racist and full of outdated stereotypes.
This year, German carmaker Daimler apologised after its Mercedes-Benz brand quoted the Dalai Lama - whom the Chinese consider a unsafe voice for separatism in Tibet - in an Instagram post. "We have nothing but respect for China and the people of China", the company said on Instagram.
The incident underscores the risks for global brands in China, where influential online citizens often respond rapidly to perceived cultural slights and can have a major impact on firms seeking to lure the country's big-spending shoppers.