You are very right in telling that there is much competition among the websites. There are, it seems, millions of them (may be billions if one considers individual blogging pages also). It is very difficult to make a niche area for one's website in this crowd. Still, there are some fields and topics where everyone cannot enter and probably these are what you are targeting or looking up to. I will try to share my knowledge in this matter. Some things which hold attention and attraction for the visitors and information seekers could be -
1. High end articles on DIY or home hobby areas - What I mean by high end articles is that it can go to a length of 2500 words and more and contains good content covering all the aspects of that particular hobby. Would require a lot of research and one can write such articles may be one per 1-2 months time.
2. Comparison sites - Today people are buying gadgets and before that they want to see the similar ones and then select one as per their liking. So comparison charts and tables are a lot handy for that. It is a tough area and might require a lot of homework. I feel it is worth trying.
3. Procedures and processes - There are a number of offices and agencies in our country and people have to approach them for some work. Whether it is a bank or state Govt office, everywhere there will be a procedure for getting something done or pursue it. So compiling these procedures and presenting it on the front page when one queries about it is also an interesting area to explore. It has immense potential for attracting traffic. The elements can be as simple as - 'How to open a Savings Bank account in Post Office?'
4. Short duration low end temporary jobs - This I was thinking for some time and it is good that you made me to recollect it. This has potential in a local area where people want to make a little money with part time short duration temporary jobs. It could be 2 hours on some week day alternating after 2-3 days gap or things like that. This requires a lot of information from the households and shops in a small area where short time work is created but people are not readily available to do that because of little remuneration and temporary nature. But there are many like students who would love to do that.
Knowledge is power.