Preheat your oven to 350°F (175°C).
Grease and flour the two 9-inch round cake pans.
In a mixing bowl, combine the flour, sugar, shredded coconut, baking powder, and salt. Mix well.
Add the softened butter, coconut milk, vanilla extract, and eggs to the dry ingredients. Beat on medium speed with an electric mixer until smooth and well combined, about 2-3 minutes.
Fold in the crushed pineapple 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 in the center comes out clean.
Allow the cakes to cool in the pans for 10 minutes. Then, carefully remove them from the pans and transfer them to a cooling rack to cool completely.
For the frosting, beat the softened butter in a mixing bowl until creamy. Gradually add the powdered sugar and coconut milk, mixing until smooth. Add vanilla extract and mix well.
Place one cooled cake layer on a serving plate. Spread a layer of frosting on top. Place the second layer on top and frost the top and sides of the cake.
Garnish the frosted cake with shredded coconut.
Slice and serve at room temperature. Enjoy your tropical delight!