Like when you send a .7z instead of a .zip or .rar to a friend or a teacher because that's what your computer has installed and they're like "Oh No, not one of those, now I have to install 7Zip" even though the same program that opens .rar also opens .7z I feel like people are way more annoyed when they receive a .7z
Mostly just different algorithms that can achieve greater compaction under different data circumstances.
There are an infinite number of compression algorithms. The trick is to find ones that result in a smaller file for the data you have, which will have some non-random pattern to it.
The choices we think of today (gz, bz2, zstd, etc.) are fairly general purpose, but sometimes you find a data file that compresses significantly more with a particular algorithm.
Hence compressed file formats like PNG, MP3/4, etc for different kinds of compressible media. Compression is all about representing data in an often dynamically sized latent space such that the majority of the data being sent needs a latent space that is much smaller than the full representation of the data.
I guess that would explain why I never use other formats, the compression itself isnt important to me, just being able to send a folder of files without a bunch of uploads