The ad, for online electricity store Powershop, shows the Chinese former dictator surrounded by Chinese people and soldiers with guns, and carries the slogan 'Same Power Different Attitude'.
It has been banned from bus shelters by Auckland Council-owned Auckland Transport over fears it could offend some members of the Chinese community.
But they have appeared online and on billboards in Auckland and Wellington.
Mr King said he did not criticise the Chinese government, but as a second generation Chinese person in New Zealand, he believed others like him who were brought up in the New Zealand culture would be more relaxed about the advert.
Members of the Chinese community might not understand the words on the poster, but be insulted because one of their leaders was being made fun of - regardless of whether they supported Chairman Mao or not, Mr King said.
Powershop chief executive Ari Sargent the company did not mean to offend anyone.
"Certainly from our perspective, Gangnam Style is quite frivolous and our ad is quite frivolous too," he said.
"But I can understand how a new immigrant might not fully understand that and I guess that's something we didn't give enough thought to."
Mr Sargent said Powershop had received about half a dozen complaints about the ad.
The Advertising Standards Authority has received two complaints.
Chairman Mao was chairman of the Communist Party of China from 1949 until his death in 1976.
His rule was estimated to have caused the deaths of between 40 million and 70 million people mainly through starvation, forced labour and executions. His supporters say he modernised the country and built it into a world power.