It absolutely
is a competitor for the A320 / 737 over medium-range routes, in fact it uses the same engines as the latest A320Neo.
Yes, its notional capacity is 25 - 30 less than the maxed-out all-coach configuration mid-tier variants from Airbus and Boeing, but that's just five seat-rows. The list price is about $30 million cheaper, though, which goes a long way to balancing slightly higher seat-mile costs.
It does have shorter range than the equivalent models from A & B, but that's perfectly fine for many airlines. Hauling around that extra structure and tankage for un-needed extra range actually costs money.
> and will mainly be used for feeder or to serve small cities.
An aircraft that can carry 168 passengers over 4,000km ( baseline ) or 5,500km ( ER variant ) will not be operating feed.