It's Little Red Ridinghood! With her little red cape and her basket with goodies for Grandma. But why she's got 'ears' I really don't know. Maybe there's a bit of a wolf in her too? ;-)
She looks a bit uncertain, but I guess that's only natural if you're about to walk through a wood with a wolf in it!
I played around a bit with there to position her on the bag.
I also quite like this one. Although, is it weird to have more than one Red? I think maybe it could look nice with a few more, a merry band of Reds all together.
There's a couple of bags in the shops (artfire + etsy), but I've also added her to some things in the t-shirt shop. One of them is a kids tee. Very cute. :-)