Where I live there is no such thing as oversupply.
Right now I live in a town of 50k~ and there are only 3 choices here - Shotokan, TKD & ''pure'' sports karate. All three are very small and both the Shotokan and TKD focus mainly on sports.
In the 300k~ person city I used to live at there were more schools and places if I recall right all in total with the different karate, judo, ju-jutsu, aikido & boxing, kickboxing, muay thai, mma around 20 schools.
But the enviornment here is very much different martial arts schools don't advertise themselves, they all just have some website and the only advertisement really is person to person and sometimes some demonstrations in schools.
Very few schools/clubs can afford to rent proper facilities and I only know of 1 that has their very own rooms. Most just use public school halls and similar places to conduct their lessons.
The schools are all very small.. And mostly filled with kids and all that though in here we don't really have the toddler classes.. Most kids classes are around 7-14.
Most schools and clubs are only around 50 students a few of the ''bigger'' clubs have around 100-200 students across the country.
Even with the almost non-existant commercialism McDojos do exist and almost all schools focus on sport sport sport.
Also 99% of Senseis have day time jobs and so on. I personally only know 1 man who earns his living through teaching martial arts and that man is the head of a world wide karate organisation for this country.
It's probably like this because the country is small and people don't have that much of an interest in martial arts here the few that do may find it very hard to get to a school because outside of the cities the availability is 0.