Preheat your oven to 350°F (175°C) and grease two round cake pans.
In a large mixing bowl, cream together the softened butter and sugar until light and fluffy.
Add the eggs one at a time, mixing well after each addition.
Stir in the vanilla extract and coconut milk until fully combined.
In another bowl, whisk together the flour, baking powder, and salt.
Gradually add the dry ingredients to the wet mixture, stirring until just combined.
Fold in the shredded coconut gently.
Divide the batter evenly between the prepared cake pans.
Bake for 25-30 minutes or until a toothpick inserted comes out clean.
Allow the cakes to cool in the pans for 10 minutes before transferring them to wire racks.