Xiaomi took China's smartphone crown in the second quarter after the Beijing-based company beat out Samsung Electronics as China's largest smartphone vendor, according to data released by Canalys this week.
Xiaomii delivered almost 15 million units in the quarter that ended in June, whereas Samsung sent out 13.2 million unit shipments.
Samsung barely edged China's Lenovo Group by just 200,000 units to take second, according to the data.
The three-year old Xiaomi grabbed fifth place by global market share for smartphone makers in the second quarter, according to research firm Strategy Analytics.
Canalys' data also revealed that Xiaomi is still almost entirely dependent on its home market. Just 100,000 smartphone units were shipped outside of China.
The company is already expanding in other locations in Asia in Singapore, Malaysia, and the Philippines. In India, the company saw more than 100,000 people pre-register for the Mi 3 model last month.
Xiaomi is also looking to expand into other markets like Brazil, Mexico, Indonesia and Thailand.
"I'm quite optimistic," said Sameer Singh, a Hyderabad-based analyst who writes about technology at tech-thoughts.net, according to Reuters.
"They do have a problem right now, but it seems to be a supply problem more than anything else," he added. "Right now, international demand far outweighs supply. That could potentially make interested customers defect to other offerings."
Xiaomi's critics have attacked the company for infringing on intellectual property right from other companies. For example, the company used the logo from Apple's Aperture application on a picture of one of its devices.
The Chinese company's reputation was also hurt when people found that it passed off copyright images as its own, according to Reuters.
The photos were taken from places like National Geographic and picture hosting site Flickr and claimed the images were taken while using a Xiaomi smartphone camera.