Chinese smartphone maker Xiaomi Corp posted its slowest-ever quarterly revenue growth as the country's smartphone market grapples with a protracted lull in sales and larger rival Huawei increases its share of the market.

Demand for smartphones has eased in China as consumers hold on to devices for longer. Shoppers have also rallied behind Huawei, boosting sales at the world's second-largest smartphone maker, which the United States has added to a trade blacklist.

Smartphone sales still account for most of Xiaomi's revenues but it has been promoting its internet services division, which mainly consists of online ad sales. The business, however, accounts for just 10% of total revenue - the same proportion as when the company listed its stock in August 2018.

Revenues at Xiaomi's smartphone business fell 8% to 32.3 billion yuan in the quarter ended Sept. 30. The company sold about 32.1 million phones during the period, roughly one million units fewer than a year earlier.

Total revenue rose 5.5% to 53.66 billion yuan from the same period last year, largely in line with analysts' expectations according to Refinitiv data.

Xiaomi has looked to foreign markets to make up for the sales drop at home but that came at a price with selling and marketing expenses jumping 16% in the quarter.

Excluding one-time items, Xiaomi earned 3.47 billion yuan, versus 2.89 billion yuan a year ago. Investors have so far appeared unimpressed by Xiaomi's efforts, pushing the stock down nearly a third so far this year.