With recent figures marking it as one of the largest smartphone makers globally, Xiaomis continues to go from strength to strength, with reports suggesting it saw its profits double in 2013.

The company, which was founded only four years ago, recently overtook Lenovo and Huawei to claim third place in terms of smartphones shipped, despite still operating almost entirely in China.

Now reports from the Wall Street Journal suggest that the firm has managed to make itself a notably lucrative business in an atmosphere where most manufacturers who produce cheap handsets are struggling to make any profit.

According to confidential documents, 2013 saw the companys profits rise 84 per cent to 3.46bn yuan (£354m) from 1.9bn yuan in 2012, while revenue more than doubled to 27bn yuan. The documents also projected 2014 profits to increase 75 per cent, taking it past 6bn yuan in profit.

The substantial figures suggest many analysts were wrong in believing the Chinese firm was selling phones at barely any profit in order to rapidly expand its market share. Instead, many are pointing to the companys marketing tactics, which focus on social media and Internet word-of-mouth instead of expensive TV commercials, as the explanation for its success.