"Our most-purchased handsets are Apple's iPhone," Lee said. "Though we do promotions on Xiaomi, HongKongers are still reluctant to buy one because it is not that popular."

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Some Hong Kong people find Xiaomi smartphones don't deliver competent localized applications. Celia Leung, a Hong Kong resident, complained on Xiaomi's Facebook page that her handset has a voice problem running Whatsapp, a mobile instant-messaging tool. Many Hong Kong netizens shared similar application bugs.

Globalizing "is an issue of great significance for Xiaomi, because the company needs to prepare for a future IPO and attract more potential investors by telling the world an inspiring start-up story," Cheney Ji, a Shanghai-based telecom expert, said.

Xiaomi provides customers with high-quality smartphones at competitive prices, making it a major advantage, Ji said. However, other factors, including branding and logistics chains, may pose challenges.

"Xiaomi has to develop localized software and Internet services to complement its expansion strategy in overseas markets," said Sophia Chen, analyst with the Taiwan-based tech research group Market Intelligence & Consulting Institute.

So far, the most significant move taken by Xiaomi to expand overseas was inviting Hugo Barra, Google's former vice-president, to join the company last October in a bid to boost Xiaomi's global business.

Tom Kang, mobile device research director of Hong Kong-based Counterpoint Technology Market Research, said Xiaomi will be successful in Asian markets as its product line and price hit the mark for sophisticated users.

"But the US and European markets will be hard to penetrate as the channel strategy is different, and building the brand will require a marketing budget that is going to require huge resources," he said.

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