Considering the MS's birthplace, please don't make his hair and eye color odd unless you create a background story that gives him those features. For example, he has blue eyes because his father is a foreign soldier.
MC reincarnates in the Kung Fu Hustle universe, in the same province as the original MC. Possibly a mix of other fictional universes as well.
MC is a poor beggar child. While strolling the streets one day, he meets the beggar selling the martial arts books in the Kung Fu Hustle universe. After haggling with him, he manages to get two books instead of one for $10, or whatever the currency is.
The martial arts are up to the fanfic creator, but the initial idea of this fanfic should be similar in power grade as the original movie. When adding other fictional work, they must be changed to adjust to this worlds power level, considering that people like the original MC and villain are really REALLY strong.
Adding realms connected to the mortal world would make it interesting, like the one in The Forbidden Kingdom movie or some sh*t. Doing this allows the fanfic author to increase the power level of their fanfic. Heck, he can go and cultivate or even learn some Taoist spells if author is up to it.
Leave a comment if you'd like of other fictional works that can be mixed in.