The three promotional videos, which have been deleted from the company's Weibo account, feature a Chinese woman using chopsticks to eat pizza, spaghetti and meatballs, and other Italian food.
The blunder appeared to be compounded when screenshots were circulated online of a private Instagram conversation in which D&G designer Stefano Gabbana referenced "China Ignorant Dirty Smelling Mafia", but they claim their Instagram account had been hacked.
Amid calls for a boycott, the furore threatened to grow into a big setback for one of Italy's best-known fashion brands in a crucial market, where rivals from Louis Vuitton of LVMH to Kering's Gucci are vying to expand.
According to consultancy McKinsey & Co., Chinese spent 500 billion yuan ($72 billion) on luxury products past year, accounting for a third of the world's spending.
"If Dolce & Gabbana was racist, they wouldn't pay tribute a lot of times to China or Japan, or even having Chinese models on their shows runways or advertising ..."
A protestor on Thursday targeted the Dolce & Gabbana store in Shanghai, plastering the storefront with the alleged screenshots of Gabbana's conversation.
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"I am really happy Chinese people are standing up to the discrimination and as money is what these brands want the most from us, we should choose wisely who we give our money to!" said another.
"We will never forget this experience and lesson, and this sort of thing will never happen again", Gabbana said.
The video ended with the pair saying the single word "sorry" in Mandarin.
The video with Chinese subtitles was posted on China's Twitter-like platform, Weibo.
Chinese consumers have flooded social media platforms Weibo and WeChat criticising the brand and posting videos and images of D&G products being destroyed, burned and used to clean floors and line animal litter trays.
The challenge for D&G is that it's not a multinational giant but a closely held Italian business run by its two founders - Gabbana and Domenico Dolce.
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Wrath over a controversial ad campaign from Dolce & Gabbana (D&G) continues to rage on, in another instance that highlights the need for cultural and political sensitivity among those aiming to cash in on the Chinese consumer.
On Alibaba's Tmall shopping portal, a search for D&G in both English and Chinese returned no results, while a check of JD.com's site also produced no D&G items.
NetEase Inc e-commerce platform Kaola confirmed it had removed Dolce & Gabbana products while luxury goods retailer Secoo said it removed the brand's listings on Wednesday evening.
Video circulating on Weibo shows people protesting outside D&G's flagship store in Milan on Wednesday night holding the print "Not Me", which Gabbana had posted when he denied ever making the remarks in direct messages on Instagram. Its ambassadors for the Asia Pacific region include singer Karry Wang. The post has received more than 80,000 likes and 5,200 comments. We take this apology very seriously as well as this message.
"If you are a brand.in China and competing with local and other global brands, if you show you don't know China, you are not going to appeal to them", she said.
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