The fact that a lot of students don't apply thinking they won't win means there may not be as many people applying as you think!
There are too many scholarships & some are not advertised well. Thus, it may only have a small pool of applicants and almost nil competition!
Scholarships that require an essay tend to be less competitive as many students get intimidated and feel they're not good writers. Many times they write it, but don't finish it, or submit it in time.
Community, regional or employment-based scholarships are usually less competitive as only a few people belonging to a specific group are eligible to apply.
Scholarships that award a smaller value are often less competitive as many students are not bothered doing work for a small amount of money.