Strategy Analytics said Xiaomi accounted for 6 per cent of all 320 million smartphones shipped during July-September. Samsung made up 25 per cent, down from 35 per cent a year earlier due to rising competition from several directions.
Apple's share also fell slightly to 12 percent.
"Xiaomi was the star performer," Strategy Analytics Executive Director Neil Mawston said in a statement.
"Samsung continues to face tough competition from Apple at the higher-end of the smartphone market, from Xiaomi and Huawei in the middle-tiers, and from Lenovo and others at the entry-level."
Xiaomi has been the top seller in its home market of China and recently entered India, where it sells phones exclusively through e-commerce site Flipkart.
Vice President Hugo Barra told Reuters in Bangalore last month that the company aimed to sell 100,000 phones a week in India in October when the country celebrates Diwali.