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China's Xiaomi has outpaced Huawei to become the third largest smartphone maker in the global market, according to market research firm IHS iSuppli.

Xiaomi has sold 19 million handsets in the third quarter of this year, IHS iSuppli said in a report released on Monday. Huawei, also based in China, sold 16.8 million.

Founded in 2010, Xiaomi has been one of the most fast-growing tech companies. It sold 5.7 million smartphones in 2012, 18.7 million in 2013, and 11 million in the first quarter of this year and 15.1 million in the second quarter.

Domestic users still dominate Xiaomi's customers. As Strategy Analytics, another market research company has noted, more than 96 percent of Xiaomi's phones sold in the second quarter went to domestic users.

The company has also been expanding its business to other Asian markets, such as Singapore and India.

Samsung and Apple remain to be the world's top 2 largest smartphone manufacturers, according to the IHS iSuppli report.