This is the rare Sonic Bubble Blower. The figure you see is actually a jar for the bubble-soap-type solution. His head unscrews, acting as a lid, so that the bubble-wand can fit inside. This resembles one of the Sonic coin banks (as he is seated on an item) but it is likely smaller.

What does the stock art on the box Sonic have to say? "Dudes I'm a radical bubble blower with a wand and lots of shield bubbles insdie!" This is a rather rare Sonic item. Quote by Connernator

With the lid unscrewed, you can see the figure is actually pretty wierd. Look how long the 'neck' of the bottle is.The bubble wand is attached inside the top of the head.