>>10892146He was a Star Wars character from the Cantina scene in A New Hope, only available in a Sears exclusive box set with a cardboard cutout of the Cantina. Kenner only had blurry black and white photos of the Cantina aliens, so they fucked up and got his design wrong as he was supposed to be wearing red not blue and be short with bare feet.
OP's version got yanked from the seat shortly after its release and a hastily produced screen accurate version was inserted into the set making the blue version rare and valuable collector-wise.