Preheat your oven to 350°F (175°C) and line a 12-cup muffin pan with paper liners.
In a medium bowl, whisk together the flour, baking powder, and salt until well combined and set aside.
In a large mixing bowl, use an electric mixer on medium speed to cream the softened butter and sugar together for 2 to 3 minutes, until the mixture is light and fluffy.
Beat in the eggs one at a time, followed by the vanilla extract, mixing just until each ingredient is fully incorporated.
Gradually add the flour mixture to the wet ingredients in three parts, alternating with the coconut milk in two parts, beginning and ending with the flour. Mix on low speed just until the batter is smooth, with no streaks of flour remaining.
Gently fold the shredded coconut into the batter with a spatula until it is evenly distributed.
Divide the batter evenly among the prepared muffin cups, filling each about two-thirds full.
Bake for 18 to 22 minutes, or until a toothpick inserted into the center of a cupcake comes out clean. Allow the cupcakes to cool in the pan for 5 minutes before transferring them to a wire rack to cool completely.