The company had offered the sex dolls for a daily fee of 298 yuan (£34; $46), according to Chinese media.
The models on offer were marketed as Chinese, Korean and Russian women, with one also modelled on the movie character Wonder Woman, complete with a sword and shield.
In its Weibo statement, the firm said its original intention had been to make expensive silicone dolls more affordable but conceded that the service triggered a heated public debate.
The company also said it would pay out compensation to users worth double the amount they had paid as a deposit for reserving a doll.
The statement added that Touch would in future pay more attention to its “social duty”, and would actively promote a “healthier and more harmonious sex lifestyle”.
Aside from its short-lived rental offering, the firm sells an array of sex toys, including sex dolls.
Makkal Needhi Maiam founder and actor Kamal Haasan on Wednesday said the Cauvery dispute between Tamil Nadu and Karnataka was not an “insurmountable problem,” and…