Sexual reproduction allows the opportunity for genetic mutations (changes) to occur. Mutations allow species to modify over time towards greater survivability. Sometimes these mutations allow individuals to move into ecological niches where there is less competition for resources. Look at a forest: fish can only survive in water, squirrels need the nuts and safety of trees, mice live in areas where they can get grass seed and foxes live where they can get mice, and on and on.
Look up the concept of primordial soup and how all life on earth came from the same set of chemicals and then, over millions of years, evolved into all the life we have.