Preheat the Oven: Preheat your oven to 350°F (175°C). Prepare two 9-inch round cake pans by greasing and flouring them.
Cream the Butter and Sugar: In a large mixing bowl, cream together the softened butter and granulated sugar until the mixture is light and fluffy. This process helps to incorporate air, producing a tender cake.
Add Eggs and Vanilla: Add the eggs one at a time, ensuring each one is well combined before adding the next. Stir in the vanilla extract for an extra flavor boost.
Combine Dry Ingredients: In a separate bowl, whisk together the flour, baking powder, and salt.
Mix it All Together: Gradually add the dry mixture to the butter mixture, alternating with the coconut milk. Mix until just combined, then gently fold in the shredded coconut.
Bake the Cake: Divide the batter evenly between the prepared pans and bake for 25-30 minutes. A toothpick inserted in the center should come out clean when the cake is done.
Cool the Cakes: Let the cakes cool in the pans for about 10 minutes before transferring them to a wire rack to cool completely.
Frost and Decorate: Once completely cooled, frost the cakes with your favorite frosting and sprinkle some unsweetened shredded coconut on top for decoration.