What does John 3:26 mean?

Based on the passage so far (John 3:25), this statement may have been coming from "the Jews," which is John's general term for the local religious leaders. The intent may have been to start a rivalry between the followers of Jesus and those of John the Baptist. This was prior to the arrest and execution of the Baptist (John 3:24; Mark 6:17–18, 27). During that time, the area around Jerusalem was filled with the preaching of both John the Baptist and Jesus. This evoked a considerable response (John 3:23). This comment may have been an attempt to inspire competition between the two men (John 4:1). The local leaders may have assumed that the Baptist would become jealous. Then, he and Jesus would waste time and energy fighting each other.

The other possibility is that a single leader spoke to followers of the Baptist. They, in turn, went to the Baptist to complain about Jesus gaining more followers.

Either way, this is a common strategy used by the Devil. Instead of focusing on God's glory, we seek our own (Matthew 6:5; 23:5–7). John the Baptist doesn't fall for the trap. He's already content with what God has given him. In fact, he's happy to see that Jesus is gaining followers (John 3:27–30). That was the primary goal of his mission.