It's not only the backlinks. There are also other factors important. The content of that site might be much better in Google's opinion. If a site doesn't have backlinks that doesn't mean it can't be ranked high! Perhaps you should get some backlinks to that site, it might be even ranked higher! (if possible). ;)
Its not my site actually, its a competitors - I probably should have made that more clear. Their site is just product descriptions copied from the various manufacturers. Our site is the exactly the same except we also have an articles section (which should surely mean we offer better content than they do?). Apart from our articles and the page design (menu and pictures) the two sites are almost identical. Before 12th March we were #1 and they were #2. Now they are #1 and we are #10-20.