Xiaomi founder Bin Lin

Xiaomi is now the leading smartphone manufacturer in China, after surpassing Samsung in second quarter sales. The Chinese vendor, whose name means "little rice" in China, has witnessed a meteoric 240 percent growth from the same period last year.

According to Canalys, Xiaomi shipped 15 million smartphones in the second quarter of 2014, up from 4.4 million sales during Q2 2013. Samsung, meanwhile, sold 13.2 million smartphones in the country, down from 15.5 million a year ago.

Xiaomi now controls 14 percent of the Chinese smartphone market share, while Samsung, Lenovo and Yulong, the manufacturer of the Coolpad handsets, each enjoy a 12 percent market share. The ability to deliver great hardware at an aggressive price point has been one of the major reasons for the immense success of the Chinese vendor over the last year. For instance, Xiaomi's recently unveiled Mi 4 has a retail price of $320, which is around half the price of what the Galaxy S5 launched for earlier this year.

In addition to the flagship Mi 3 and the Mi 4, Xiaomi has seen a lot of interest in its value-based product offerings in the Redmi series, which normally retail for around $100. Xiaomi relies of direct consumer sales and does to spend much money on advertising, which allow the vendor to minimise overhead when selling smartphones.

The brand has also managed to find a successful revenue stream with its MIUI custom ROM, which is pre-installed on all of its handsets. While MII itself is free, Xiaomi runs a theme store and offers services that are available for purchase.

Although an overwhelming 97 percent of Xiaomi's sales were accounted for in mainland China, the smartphone vendor is looking to expand into other markets as it seeks to attain its 60 million sales target for this year.

Source: Canalys