Preheat your oven to 350°F (175°C). Grease and flour two 9-inch round cake pans, or line them with parchment paper for easy removal.
In a mixing bowl, combine the flour, shredded coconut, baking powder, and salt. Stir until well combined and set aside.
In a separate bowl, cream together the softened butter and sugar until light and fluffy. Add the eggs, one at a time, beating well after each addition. Stir in the vanilla extract.
Gradually add the dry ingredients to the wet ingredients, alternating with the coconut milk. Mix until just combined, being careful not to overmix.
Divide the batter evenly between the prepared cake pans, smoothing the tops with a spatula.
Bake in the preheated oven for 25-30 minutes, or until a toothpick inserted into the center of the cakes comes out clean.
Remove the cakes from the oven and let them cool in the pans for 10 minutes. Then, carefully transfer them to a wire rack to cool completely.