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Less competition is normally considered a good thing. Less people to fight with for clients, for attention, for resources, for business, and especially for money. When there is one or a few businesses, they will thrive because the customer has so little to choose from. Businesses will become complacent and stuck in their ways since there is no push to be innovative or explore new options. They have the lion's share and there is no need to change.
Being a freelancer, there is a lot of competition out there to be seen by potential customers and to attract new clients. Even keeping your old clients becomes a challenge. If another designer comes around and offers them the same work for less, you'll either have match your competition to keep your client or pose a risk of loosing them. Hopefully you pick your clients well and they'll stick with you because you deliver what they need and are worth sticking with. This might seem like a downer to having lots of competition, but it can also be a blessing.
Designers and creatives that never break out of their comfort zone will become stagnant. They will continue to produce the same old work over and over. If your clients leave you to work with someone else, that's your cue to start becoming innovative. What is this new person offering that you aren't? If you lose clients because of it, it is certainly worth investigating and learning. If you're just getting started in the field, having a wide range of skills will make you far more valuable.
Competition is a good thing. You don't have to have the loudest voice in the crowd to be noticed, what you produce should speak for you. Having other creatives speaking next to you should encourage you to speak differently. It can also be very discouraging. How will anyone notice you if you're one in a hundred? A thousand? Freelancing isn't easy, and anyone who tells you otherwise is lying. It is a constant competition between you and other creatives, and mostly between you and yourself. If you feel defeated, you'll quit.
To avoid feeling pressure from so much competition, just try looking at it a different way. Don't see other creatives as competition, but fellow team members. Example and watch how everyone presents themselves and what they produce. Take note on ways that speak to you, disregard methods that you know don't work. It's a lot of trial and error. But overall change your perspective on the idea of competition. Less people to compete with doesn't guarantee that you'll get the most work. If your work still isn't what clients are looking for, they'll move on. If you don't offer anything different than what else is readily available, the defining factor will be the price.
Learn from your peers and continue to push your own skills and abilities. If you stop trying you'll be less visible. Embrace the challenges and compete only with yourself.
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