CHINESE comedy "Lost in Thailand" well illustrates the concept of "Small is beautiful." The low-budget hit has raked in a Chinese mainland box office of 1.2 billion yuan, only second to Avatar's 1.38 billion yuan in history.

The big news in China's entertainment industry is a low-budget Chinese comedy from a rookie director that set a box office record of 1.2 billion yuan (US$159 million), beating all Hollywood blockbusters so far, save "Avatar."

The domestic hit "Lost in Thailand" was released on December 12 and raked in 100 million yuan in the first three days. On January 1, it became the first Chinese-made movie to surpass 1 billion yuan in ticket sales.

Its plot is simple and somewhat Hollywood-esque. Two Chinese businessmen battle one another to secure the authorization signature of their partner in Thailand for a newly developed fuel-oil additive. En route to find the partner, they meet a slow-witted pancake chef, and that's where the fun begins.

The film was made on a budget of 30 million yuan, and movie fans simply love it.

Fans like Brenda Sun, 31, a marketing manager in Shanghai. "It's fun and laid-back," she said. "I wanted to see something to cheer me up, and the movie did.

"I got a 50 yuan Wagas chicken sandwich after paying for a 16.50 yuan Big Mac," she added, referring to the food at a Western cafe chain. "For the price, I got two hours of laughter and left in a good mood. It was certainly worth it."

Gross receipts from the film show no sign of abating. "Lost in Thailand" is now on track to challenge "Avatar," which was the most successful box office ever in China at 1.38 billion yuan.

Ten-fold return

Beijing Enlight Media, the studio that produced the comedy, is laughing all the way to the bank. The company, which has claim to 43 percent of box office sales, is expected to reap a 10-fold return on investment.

The cinema triumph has also excited the stock market. Enlight Media's shares have soared more than 50 percent since the film was released. The stock trades on ChiNext, the Nasdaq-style board in Shenzhen for Chinese start-ups. It was listed in August 2011 - the third TV, movie and media company to go public on the board.

Xu Zheng, the film's director and also one of its three leading actors, is amazed by the success of "Lost in Thailand."

"It's like a runaway horse with no reins," he said during a TV interview. "It's far more than a movie. It's a cultural phenomenon."

Enlight Media Chairman Wang Changtian has emerged from the wings and into the limelight since the success of the film. He started his career as a TV journalist in Beijing.

"The buzz is even greater than that when we went public," he said of his company. "At that time, we were known only within the media industry and capital markets. That's all changed now." Wang set up Enlight Media in 1998 as mainly a television production company. He moved into cinema in 2006. The firm has invested in 40-plus films since then, according to earlier media reports, but most of them were mediocre at the box office.

Indeed, Chinese forays into cinema production have a checkered history.

In the past, the first job of film-makers is not to entertain the masses. Beginning in the late 1980s, the so-called "fifth generation" of Chinese filmmakers, which included directors such as Zhang Yimou and Chen Kaige, produced movies that were popular in foreign art houses but failed to excite moviegoers back home. More recently, Huayi Brothers Media Group came up with a dud in its blockbuster "Back to 1942," a big-budget venture directed by famed director Feng Xiaogang and featuring an A-list cast that included Oscar-winners Tim Robbins and Adrien Brody.

Some moviegoers shunned the epic because it focused on the story of a devastating famine in China in 1942 - hardly cheerful fare during the holiday season. ChiNext-listed Huayi Brothers got punished by investors, with firms like China Investment Securities cutting their earnings forecasts for the company.

Despite Lost in Thailand's sales success, local movie market is still under the pinch of Hollywood productions, while China gives foreign studios more leeway in the market.

Authority has granted film distribution licenses to private companies, increased film import quotas, from 20 to 34 last year, and boosted the share of box office revenue that foreign studios can receive from 17.5 percent to 25 percent.

According to box office reports, only three domestic films ranked among the top 10 grossing movies in Chinese mainland last year. In 2012, total box office receipts in the market topped 17.1 billion yuan, up 30 percent than a year ago. Domestic films contributed to 48.5 percent of the total last year, the first time beaten by foreign films as China increased the quota for imported features, especially for those higher-priced 3D or Imax versions, and granted them more share for the box office.

"The market positions of domestic films are strongly challenged when the battleground is open wider to competitors," said Tong Gang, head of the State Administration of Radio, Film and Television, the national industry watchdog, on January 9. "Amid the fierce competition, some low-budget films like Lost in Thailand showed that a box office more than 100 million yuan is no longer exclusive for blockbusters. Good story and sharp market positioning can also bring excellence."

Last year, 745 domestic features were made. However, According to market estimates, only about a third of them survived on the big screen. Some films were withdrawn after only one day on the marquee because of poor ticket sales and bad reviews.

Hollywood, cognizant of the huge market potential in China, has been lobbying for more of its productions to be allowed into the country when China is opening up its film sector.

Chinese moviegoers

Overseas movie producers are angling to cater more to Chinese moviegoers by setting scenes in China, as evidenced by the new Bond movie "Skyfall" and by using Chinese actors in films like "Looper" and "Cloud Atlas." Some films hit the silver screen of China ahead of its North American debut, as the case of The Adventures of Tintin: The Secret of the Unicorn.

China is already the second-biggest film market in the world, and it's expected to surpass the United States by 2020, according to a report by accounting firm Ernst & Young. The November report projects that the media and entertainment industry in China will grow by 17 percent a year through 2015. China plans to build 25,000 cinema screens in the next five years to cope with demand from an increasingly affluent population.

Last year, 3,832 screens were added, with an average daily growth of 10.5 screens. In the last decades, screen numbers grew to 13,118 from 1,845 in 2002. All are built on forecast that more moviegoers will go deeper their pockets. No wonder more studios are eager to produce more movies to cater to the need.

There's are serious lesson to be drawn from "Lost in Thailand."

You don't need to go global to grab the hearts of moviegoers, and you don't need to burn through millions of yuan to secure a Hollywood A-list star. In other words, the Hollywood success story doesn't need to emanate from Hollywood.