Preheat your oven to 350°F (175°C). Grease and flour two 9-inch round cake pans.
In a large mixing bowl, combine the flour, sugar, baking powder, and salt. Mix well.
Add the softened butter, coconut milk, eggs, and vanilla extract to the dry ingredients. Beat on medium speed for about 2 minutes until the batter is smooth.
Gently fold in the shredded coconut until evenly distributed.
Divide the batter evenly between the prepared cake pans.
Bake in the preheated oven for 25-30 minutes or until a toothpick inserted into the center comes out clean.
Allow the cakes to cool in the pans for 10 minutes, then transfer them to a wire rack to cool completely.
While the cakes are cooling, prepare the whipped cream. In a medium bowl, beat the heavy whipping cream with an electric mixer until soft peaks form. Gradually add the powdered sugar and vanilla extract, continuing to beat until stiff peaks form.
Once the cakes are completely cooled, place one layer on a serving plate. Spread a layer of whipped cream on top, then place the second cake layer on top.
Frost the top and sides of the cake with the remaining whipped cream. Optionally, sprinkle additional shredded coconut on top for decoration.