1 – You are looking at the wrong main competitor, because they are quite a small fish in the sea and
2 – You are looking at the wrong keyword – “cat scratch pad” is the main keyword, it looks like. It is a much more popular search term.
Try redoing the numbers using that keyword, but in short, I think the fact that you already see a lot of competition on page 1 for the lesser keyword will give you insight into just how truly competitive this product is going to be. Meaning, it will almost certainly go over your budget if you don’t cherry pick the data/competitor to fit your needs. You have to use the REAL numbers that are there. 🙂