It's just a diminutive form of "bag", ie. "small bags"? Just like you have for instance "telefonino" as the diminutive of "telefono" in Italian, literally "sma

It's just a diminutive form of "bag", ie. "small bags"? Just like you have for instance "telefonino" as the diminutive of "telefono" in Italian, literally "small telephone". And in German you add -chen or -lein to words to create the diminutive, so "Hund" becomes "Hündchen" (adding an umlaut as well, if applicable). Generally I think it's very common for a lot of languages to add a cutesy suffix to the base word, in order to create the diminutive.