Preheat your oven to 350°F (175°C).
Grease and flour an 8-inch round cake pan.
In a bowl, cream together the butter and sugar until light and fluffy.
Add the eggs one at a time, beating well after each addition.
Mix in the vanilla extract and coconut milk until combined.
In another bowl, whisk together the flour, baking powder, and salt.
Gradually add the dry ingredients to the wet mixture, mixing until just combined.
Fold in the shredded coconut gently.
Pour the batter into the prepared cake pan.
Bake for 25-30 minutes or until a toothpick comes out clean.