When more people sharing the same piece of cake, you need more effort to get a very small share.

This is reflecting on what you trying to do. So if you still want to remain in the crowded market, you should expect you may still survive but cannot make a good profit.

A promising market must show the potential of growth whether it is uncharted, blue market, early stage, growth stage, it will be far more a better market than the crowded market from ROI viewpoint.

Sometimes people stay in a crowded market as there is still sufficient volume to generate decent profit in dollar sense.

So, how to make a place in already crowded business despite knowing the above?
1. increase selling by reducing the price (your competitive advantage left the low-cost advantage).
2. cut down overhead to keep you survive
3. into R&D to develop a unique product that is disruptive enough to turnaround the table in that said market.
4. Most of the competitors are veteran in the market, partner with them, be friendly with them, to explore collaboration for mutual benefits.

Frankly, if giving me a chance, I will look for a promising market to venture.