But the Commonwealth Games champion, who had considered retirement earlier this year after a series of injuries, held her nerve to secure a victory which gives her a second-round tie against Kristina Ludikova of the Czech Republic.
"We were fairly close, especially the second set," said Hallam, the world number 14.
"It was just a matter of keeping my nerve, not thinking about what the score was, just playing the point."
Ireland's Chloe Magee also won through after coming back from a game down to beat Estonia's Kati Tolmoff 2-1.
Indonesia started their medal campaign with a shock, Maria Kristin Yulianti fighting back from a set down to defeat world number 13 Juliane Schenk from Germany.
In the men's event, Smith will now take on Germany's Marc Zwiebler, who was forced to fight hard against the Ireland's Scott Evans before sneaking through 2-1.
Taiwan's Hsieh Yu Hsing was given plenty of support from the Chinese crowd as he stormed to a 2-0 victory over Iran's Kaveh Mehrabi.
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