Lei Jun, CEO of Xiaomi Corp, tries Redmi Pro, a new Xiaomi handset released on Wednesday in Beijing, while actress Liu Shishi looks on. [Photo/China Daily]

Xiaomi Corp, the once-hot Chinese smartphone maker, saw shipments tumble 38 percent in China in the second quarter of the year as Huawei Technologies Co took over the top spot in the world's largest market.

Xiaomi shipped 10.5 million smartphones in the quarter, down from 17.1 million in the same period a year earlier, according to research from International Data Corp. That made the company the fourth-largest competitor in the market behind Huawei, Oppo Electronics Corp and vivo Mobile Communication Technology Co Ltd. Xiaomi was once valued at $46 billion, according to CB Insights.

The Chinese market has grown increasingly competitive as domestic manufacturers have improved their quality, design and marketing, putting pressure on global leaders Apple Inc and Samsung Electronics Co. Apple saw shipments drop 32 percent in the second quarter and the iPhone maker fell to fifth in the market, according to IDC.

The research firm said that Huawei and Oppo gained ground by concentrating on one or two key attributes in their marketing messages. Huawei emphasized the Leica lens now available on its phones, while Oppo pitched fast-charging technology.

Apple's global shipments are set to decline in 2016 as it continues to lose ground in its largest overseas market, Canalys said in a report.

Bloomberg