Most people think that a straightforward reading of the text says that God is telling those people that he is first among many. He is the god of Israel, and those other gods are for other people.
Also, a lot of historians think that this was a fairly accurate description of belief at the time Exodus was written. The Bible itself says that in Israel, a lot of people worshipped Ashteroth/Asherra/some other variant of "Ishtar". There is some archeological evidence that stongly suggest that there were two deities in the neighborhood back then, one male and one female, Yahweh and Ashteroth, and over time, the male guy became dominant, and the female was written out except as the bad deity that Israel worshipped when they fell away from the one, true, God.
It's hard to say what it "really" means, because what we have in the Bible today was cobbled together from lots of sources. What did the original authors have in mind? That's pretty much lost to history.