After an encouraging performance in defeat at home to Barcelona last month, the Blues put on a brave show at the Stadium Marcel Cerdan.
They handed a debut to 15-year-old Angus Gunn, son of former Norwich keeper Bryan, as usual keeper Eirik Johansen was away on international duty with Norway Under-21.
Gunn made a bright start, denying the impressive Chris Gadi-N’Kiasala, but he was beaten on 18 minutes when Omaur Diop crossed and Wesley Jobello lifted his shot over the young stopper.
City were struggling to get into the game in the first half, but Andy Welsh’s pep talk at half-time saw a much better display after the break, with Spanish starlet Denis Suarez making his presence felt.
City pressed hard but could not find a way through, while Gunn had to be alert to deny Jobello with his feet.
Eight minutes from time Marseille sealed the win on the counter-attack, Diop racing down the City left and crossing for substitute Madjid Ammari to score.
The hosts gave the scoreline a more emphatic look deep in added time as Florian Mouet fired home from 18 yards.
The Blues now face Celtic, who have also lost their two opening games, at Ewen Fields on October 17, needing to win to stay in with a chance of qualifying for the next stage.
CITY: Gunn, Coulson, Plummer, Rekik, Meppen-Walter, Roman, Clowes (Evans), Huws, Henshall (Rubnak), Suarez, Bunn (Hiwula)
Blues owner Sheikh Mansour remains top of FourFourTwo's Football Rich List for the 2011-12 season, with the magazine reporting he is worth £20billion.
Sheikh Mansour, a member of Abu Dhabi's ruling Al-Nahyan family, has invested heavily in City since the 2008 takeover and been rewarded by seeing the team qualify for the Champions League and win the FA Cup.
They have also made a positive start to the 2011-12 campaign. Tweet
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Where is the match report for the youth team that beat united away 3-1 on Saturday?
Yes Brennan couldn't get this report on here quick enough could you, I detect some gloating.
Why will no-one at your disgusting newspaper ever explain the biased reporting aimed against MAN CITY only last week when we laid the wreath at Munich your reporters talked about a city being united.
But once again you fail to see that highlighting a defeat for our youth team while ignoring a 3-1 win against our bitter rivals is so offensive and unfair that most CITY fans feel let down by you when in all honesty your paper should be completely impartial and equally support both prem league teams.
Inexplicable that a youth team defeat away at Marseille gets a MUEN report, whereas the youth team derby match between the 2 Manchester clubs doesn't even get a mention in the local MANCHESTER newspaper. WTF is going on?
mahh mahhh mahhhh citeh never got a mention whe we beat the rags 3-1 mwahhh mahhh bahhh wahhhhh, tissue anyone ?
Typical MUEN reporting in where they publish what or when they like and once agin such as in this case it points to their anti Man City agenda....sick or what?
Typical MUEN
The whole purpose of playing in this new league is to test young players ability against the european best and too development awareness of tatics etc. If we lose a few games in the process SO WHAT !!!
For our EDS to beat Hull \ Oldham etc 5-0 and go away celebrating is worthless !!
Anyone actually wondering were the match report is of Citys under 19s win against Trafford under 19s its on the website obviously its not going to be in this newspaper or website is it?
CTID